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PRESS RELEASE NO. 11/2020 Pension Commission Report: Little Light, Much Shadow

Experts are currently refraining from recommending an increase in the retirement age +++ Prospects for reform remain insufficient +++ Pension reform must aim to ensure coverage for the working population

IG Metall, Mainforum, Gebäude, Fahnen
Foto: IG Metall

27 March 2020 27 March 2020

Frankfurt am Main – Jörg Hofmann, President of IG Metall, welcomes the fact that the “Reliable Intergenerational Contract” Commission is not proposing any further increase in the retirement age beyond 67. “It’s good that the commission is not participating in the debate over a further increase in the retirement age. Many workers won’t even be able to work until age 67. It’s also good that the commission is considering including civil servants in the statutory pension insurance system,” Hofmann said Friday in Frankfurt during the presentation of the report.

A pension level that could drop to 44 percent, as the Commission is considering, is completely unacceptable to IG Metall. “The current rate of 48 percent was already a correction to earlier reforms. Falling below that level is unacceptable,” said Hofmann. IG Metall is therefore calling for the pension level to be stabilized at 48 percent and raised in the medium term.

IG Metall advocates for an employment-based insurance system into which civil servants, freelancers, and the self-employed—including those just entering the workforce—would also contribute. This is not only a matter of fairness; combined with a higher tax rate and a higher labor force participation rate, it would also curb the rise in contribution rates. “An insurance system for the working population must be the goal of pension reform,” said Hofmann.

Hans-Jürgen Urban, executive board member of IG Metall, also criticized the inadequate reform proposals. He noted that the commission had focused primarily on costs and contributions and only then considered the benefits that these were intended to finance. “That’s putting the cart before the horse. We need to refocus on what an acceptable pension level should be. The purpose of the pension insurance system is to ensure adequate support in old age, not to keep contribution rates as low as possible,” the union representative insisted.

Overall, Urban believes the discussion about contribution levels falls short. “Low contributions do not reflect intergenerational justice, nor are they in the interest of young people. Low contributions also result in low pensions. The gaps must then be covered privately by younger people, without any financial contribution from employers.”

Further information and press photos of Jörg Hofmann

Further information and press photos of Hans-Jürgen Urban

Hartmut Steiger

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