Critique of proposed pension scheme emerges from German economic sphere
Business heads from Germany have sharply criticized the proposed new pension plan, labeling the pledge to maintain a pension level of 48% by 2039 as "short-sighted and unrealistic" in light of demographic complications. The President of the Employers' Association, Rainer Dulger, voiced these opinions on Friday. He emphasized that the young and employers would endure the brunt of this, making employment "increasingly less appealing."
During the initial parliamentary reading on Friday, the Bundestag discussed the "Rentenpaket II" proposed by Federal Minister of Labor, Hubertus Heil. This package aims to secure a pension level of 48% of average earnings until 2039 and introduces a pension system pillar supported by stocks, named "Generationenkapital." The eventual profits from this capital would later fund pension payments.
However, discussions within the coalition continue regarding the pension plan's costs. The reform is projected to induce a "stronger but acceptable rise in contribution amounts" beginning in 2028, as per the draft law. By 2045, the contribution rate could surge to 22.7%. The anticipated revenues from "Generationenkapital" could lessen this to 22.3%. The current pension contribution rate currently hovers at...
The criticism from German business leaders towards the pension plan seems to indicate concerns about the state of the economy, as they view the proposed 48% pension level by 2039 as challenging given the country's demographic complexities. Despite these challenges, the government is pushing forward with the reform, expecting a "stronger but acceptable rise" in contribution amounts starting in 2028.
