DGB Pension Commission Here’s How We’ll Save Pensions—But Fairly!

Everyone agrees on one thing: The pension system needs reform. But it’s crucial that these reforms be fair and based on solidarity.

The German Trade Union Federation (DGB) has therefore convened its own Pension Commission, on which IG Metall is represented by its First Chair, Christiane Benner. This commission has now presented its recommendations for pension reform.

The focus is on:

• Safeguarding the standard of living in old age
• A comprehensive occupational pension system (bAV)
• Smoother transitions for all those who are unable to work full-time until the standard retirement age

Workers who have worked their entire lives, raised children, or cared for family members must be able to maintain their standard of living in old age. This is the guiding principle for all recommendations of the DGB Pension Commission.

The unions’ goal: a net pension benefit of 70 percent of the average earnings over one’s working life. The commission therefore recommends raising the pension levelto at least 50 percent and, in the long term, to 53 percent.

Further key recommendations from the DGB Pension Commission:

Solidarity-Based Financing:

A sustainable pension system requires solidarity-based financing. To this end, the Commission makes a series of proposals: High incomes, large fortunes, and investment income should be tapped more heavily to finance common tasks. To address the aging of society, the federal government should introduce a demographic subsidy funded by tax revenues. The Commission expressly rejects financing through cuts to social benefits or higher excise taxes.

Occupational Pensions for All:

All employers should be required to provide their employees with an occupational pension plan based on collective bargaining agreements. The goal: an additional, fully funded pension (in addition to the guaranteed benefits from the statutory pension), which can achieve a total pension levelof 70 to 90 percent of final net earnings.

Flexible transitions instead of a higher retirement age:

The DGB Commission firmly rejects raising the retirement age. This would be nothing more than a disguised plan to cut pensions. After all, many workers are already unable to work until the standard retirement age.

Instead, the commission calls for transitional solutions: extending eligibility for the old-age pension for people with severe disabilities—currently available starting at age 62—to include workers with health limitations as well. It also calls for the introduction of a partial pension without reductions for anyone who, for health reasons, can only work part-time. Additionally, there should be more focus on prevention, rehabilitation, and reintegration.