Pension insurance corrects negative forecast
Retirement at 70 would not please Germans at all. A report by the pension authority now gives reason for hope. Contrary to fears, demographics are developing more favorably. The fund's finances are also looking better than predicted.
Despite the rising average age in the country, the German Pension Insurance (DRV) has given the all-clear for the financing of pensions. "In the coming years, the demographic burden will increase significantly less than previously expected," DRV President Gundula Roßbach told the "Bild" newspaper. In this context, the newspaper quotes the new population forecast from the Federal Statistical Office, according to which the proportion of old people in the population will increase less significantly in the coming years than previously thought.
According to the projection, there are currently 34.8 over-65s for every 100 people aged between 20 and 65; by 2060, this figure is expected to rise to 44.7 old people. However, previous calculations had predicted an increase to 55 senior citizens.
According to "Bild", the situation of pension finances is also much more favorable than predicted in previous years. In the 15-year forecast of the 2009 pension insurance report, the German government had predicted a contribution of 20.6 percent for 2023. In reality, the contribution has been at 18.6 percent for seven years and is expected to remain at this level up to and including 2027.
"Pension finances more favorable than assumed"
"We have succeeded in keeping the contribution rate stable over a longer period of time, contrary to forecasts," said Roßbach. Bild also quotes a report by the Federal Government's Social Advisory Council, according to which the development of pension finances will also be "more favorable than assumed in previous years" in the longer term. The pension fund is currently "financially sound".
In times of increasing life expectancy, the report could provide some relief: for many Germans, the debate about raising the retirement age is a cause for concern. According to a survey, most people in employment in Germany are against a later retirement age. A good two thirds would prefer to pay more into the pension fund. Among 18 to 39-year-olds, as many as 70 percent would prefer to make higher contributions, according to the survey commissioned by the German Trade Union Confederation (DGB) in February.
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The German Pension Insurance (DRV) has revised its pension policy, suggesting that the increase in the proportion of elderly individuals in the population will be less significant than previously anticipated. This positive development, coupled with the financial stability of pension funds, has led to a more favorable pension finance situation than initially predicted.
As a result of this new pension policy, the contribution rate for pension funds has remained stable for several years, contravening previous forecasts. This stability, combined with the anticipated favorable long-term development of pension finances as suggested by the Federal Government's Social Advisory Council, points towards a financially sound German Pension Insurance system.
Source: www.ntv.de
