A growing chorus of political voices in Germany are calling for an end to double contributions levied on certain private pension schemes, known as “Direktversicherungen”. The current system, which requires contributions to statutory health and nursing care insurance upon payout of these policies, is increasingly viewed as unfair and damaging to private retirement savings.
Simone Borchardt, health policy spokeswoman for the CDU/CSU parliamentary group, highlighted the lack of reliability from legislators as a key concern. She argues that the retroactive application of contribution rules to existing contracts, funded from already-taxed income, undermines trust in government and discourages future private savings. Approximately 6.3 million policyholders are reportedly affected by this “double contribution” issue, potentially facing a reduction of around 20% of their accumulated savings due to these payments.
Borchardt emphasized that individuals taking personal responsibility for their retirement should not be penalized with double taxation and pointed to agreements within the current coalition contract between the CDU/CSU and SPD to improve the framework for supplementary pension provisions. Addressing this issue is considered a critical step in achieving that goal.
The call for reform is not limited to the governing parties. Sarah Vollath, spokesperson for retirement and old-age policy for the Left party, labeled the double contributions a “political error”. She contends that millions of people who saved in good faith are now being unfairly burdened upon payout, actively eroding confidence in the system.
While acknowledging a partial relief achieved through a 2019 exemption, Vollath argues it doesn’t resolve the core issue. The Left party proposes complete contribution relief upon payout, expanding the exemption to include nursing care insurance, halving contribution rates for higher pension amounts exceeding the exemption and ensuring full protection for contracts predating 2004. Vollath maintains that gaps in healthcare funding should not be filled by penalizing those who proactively save for retirement and that the social state should support, not punish, diligent savers.
