Press Release No. 52/2016 IG Metall and ver.di welcome the willingness to make important adjustments to pension policy – ...

Frankfurt am Main/Berlin. IG Metall and the United Services Union (ver.di) welcome Federal Labor Minister Andrea Nahles’ willingness to develop a plan to enable a permanently higher pension level in the statutory pension insurance system. In a joint initial assessment of the proposals presented today by Minister Nahles, Jörg Hofmann, President of IG Metall, and Frank Bsirske, President of ver.di, unanimously state:

“1. The proposed plan includes important adjustments to pension policy, which we welcome. We also welcome the establishment of a target level extending beyond 2030. This also applies to the willingness to raise the contribution rate for the jointly funded statutory pension system to ensure an adequate pension.

2. We also consider the principle of working with safety lines and target lines to be correct. However, the level of the targeted safety line for the pension level is insufficient. We call for the stabilization of today’s pension level at a floor of 48 percent instead of 46 percent; in a further step, we believe it is necessary to raise the target line to approximately 50 percent. This target line can be achieved through a higher tax subsidy.

3. It is true that achieving these target levels depends directly on developments in the labor market, wage levels and collective bargaining coverage, labor force participation, and skill levels. A sustainably growing economy with corresponding investments in infrastructure, education, and socially necessary services—along with their equitable financing through additional taxes on high incomes and wealth—are important framework conditions in this regard. This is another reason why it is appropriate to set binding thresholds for pension levels beyond the year 2030.

4. We also consider it necessary to create a demographic reserve. We view a gradual increase in pension insurance contributions as the appropriate way to achieve this.

5. The improvements to the disability pension and the alignment of pensions between East and West Germany, which were approved last night, are steps in the right direction. In principle, this also applies to the strengthening of occupational pensions. However, we still see a significant need for further improvements in this area.”