The administrative authority aims to enhance retirement benefits stemming from work.
Government plans to enhance work retirement benefits. On Wednesday, the cabinet endorsed a bill from the Federal Ministry of Labour, improving assistance for employees with lesser earnings. "We're making work retirement benefits commonplace for employees, particularly for those with lower incomes and employees of smaller firms," stated Labour Minister Hubertus Heil.
The income qualification for work retirement benefit assistance is set to climb to €2,718 per month, from the present €2,575. Also, this threshold will become dynamic to prevent employees from losing their eligibility due to wage boosts. Payment methods will become more adaptable, enabling pensioners to blend their work retirement benefits with a fractional pension from the mandatory retirement scheme.
The social partner model, initiated in 2018 via collective agreements, will be expanded. This will simplify participation for companies and their employees in existing models, according to the Ministry of Labour. "This will provide small businesses the chance to organize straightforward, efficient, and secure work retirement benefits," it mentioned. The objective is to "boost and widen work retirement benefits as a second pillar of old-age provision alongside the mandatory retirement."
"Together with the Retirement Package II, which ensures a steady and dependable mandatory retirement, we're ensuring people are secure in old age," Heil noted on the new regulations. "No one should stress about their finances in old age," he underlined. "The combination of mandatory and work retirement benefits, ideally both at 40% of the last net income, is the finest method to achieve this."
The government's plan to enhance work retirement benefits primarily focuses on employment and occupational pensions, aiming to make them more accessible for employees with lower income levels. With the income qualification for work retirement benefit assistance set to increase to €2,718 per month, employees who previously fell just below this threshold will now become eligible.
The expansion of the social partner model will further facilitate the provision of work retirement benefits, especially for employees in smaller firms, thereby improving employment and occupational pensions for a wider range of individuals.
