2 months ago
#Germany #PensionSystem #LockBox
"Germany's baby boomers are retiring. Those born between 1955 and 1969, when the birth rate was at an all-time high, are also living longer. At the same time, the workforce is shrinking. So who will pay the elderly's pensions?
The pension system in Germany, established in 1889, is based on a public retirement insurance scheme in which the pensions of current retirees are paid using insurance contributions from the currently employed — a system known as the "intergenerational contract."
At the beginning of the 1960s, there were still six actively insured workers for every old-age pensioner. Now that ratio is 2:1, and sinking further.
A considerable chunk of the federal budget goes into propping up the pension system: €127 billion ($138 billion) will flow into the retirement fund in 2024, a third of all government spending. This sum is estimated to almost double by 2050, which is bad news in times of high expenditure in other areas such as defense.
At the same time, pensioners constitute a considerable and growing voter base. So safeguarding the pension system has become a topic for heated debate — and for action.
Germany's three-party center-left coalition government does not want to cut pensions, increase pension contributions or raise the age of retirement beyond the planned increase to 67 by 2029..."
"Germany's baby boomers are retiring. Those born between 1955 and 1969, when the birth rate was at an all-time high, are also living longer. At the same time, the workforce is shrinking. So who will pay the elderly's pensions?
The pension system in Germany, established in 1889, is based on a public retirement insurance scheme in which the pensions of current retirees are paid using insurance contributions from the currently employed — a system known as the "intergenerational contract."
At the beginning of the 1960s, there were still six actively insured workers for every old-age pensioner. Now that ratio is 2:1, and sinking further.
A considerable chunk of the federal budget goes into propping up the pension system: €127 billion ($138 billion) will flow into the retirement fund in 2024, a third of all government spending. This sum is estimated to almost double by 2050, which is bad news in times of high expenditure in other areas such as defense.
At the same time, pensioners constitute a considerable and growing voter base. So safeguarding the pension system has become a topic for heated debate — and for action.
Germany's three-party center-left coalition government does not want to cut pensions, increase pension contributions or raise the age of retirement beyond the planned increase to 67 by 2029..."
