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Pension level can also be secured without a new pension formula

Study Institute of Econometrics and Statistics


According to Eckart Bomsdorf, a fine adjustment of the current pension formula is sufficient to stop the decline in pension levels in the short and medium term. "In the long term, it is still possible to halve the dampening of pension adjustments and the resulting reductions," says Bomsdorf.

In somewhat simplified terms, the pension level indicates what percentage of his last income a standard pensioner with 45 contribution years and average income receives from his last income as a pension. In his study, the author proposes several modifications to the pension adjustment formula without fundamentally changing it and without arbitrary cuts. "The pension formula only needs to be checked for its closeness to reality and consequences must be drawn from this without questioning the formula in general. Replacing an already complicated pension formula more often lacks the necessary stability," says Bomsdorf. "It must not give the impression that client thinking or the cash situation are decisive."

The study is based on the current pension formula and examines in particular the so-called pension provision factor, which includes expenditure by employees for statutory pension insurance and the Riester pension. Bomsdorf states in its investigation that a problematic approach is currently being taken here. For example, in the event of a change in the contribution rate for pension insurance, this change will have a full effect on the pension adjustment, although the employees only pay half of this contribution. This is where a suggested modification of the study comes in. At the same time, it takes account of the fact that the non-compulsory Riester pension has become established to a much lesser extent than planned. "However, it is currently fully priced in in the pension formula," says Bomsdorf. If it is also taken into account that the standard pensioner would also have to be redefined due to the increase in the statutory retirement age, this also results in a higher pension level.

The measures mentioned make it possible to achieve a pension level several points higher than without them. In summary, this could result in a pension level for 2030 that is more than three points higher than currently assumed. Up to this year a pension level of 48% could even be maintained. Although a drop in the level cannot be avoided in the very long term, it could be more than halved and at reasonable costs below those for maternity pensions. This comparison is by no means intended to play off different changes in pension insurance against each other, but merely to demonstrate that the measures indicated are affordable. Bomsdorf sums up: "It should and can succeed without the - felt - hundredth new pension formula to come closer to the goals of the coalition agreement in the pension reform. A fine adjustment of the current formula will do."

Bomsdorf also points out that the importance of pension levels is overestimated. It is not the same as the pension rate for civil servants. No one can deduce the amount of his pension directly from the pension level.