The CEO of Deutsche Börse, Stephan Leithner, is advocating for a comprehensive overhaul of Germany’s pension system. In a commentary published in the Handelsblatt, he proposes a system where every newborn child is automatically assigned a state-supported investment account. Leithner suggests mirroring the existing process of assigning tax identification numbers at birth, asking why a corresponding investment account number shouldn’t follow suit.
Leithner argues that the current pension financing model is unsustainable given Germany’s demographic trends. He believes a greater integration of capital markets is necessary across all three pillars of retirement planning – state, occupational and private. Drawing inspiration from international models, he cites Sweden’s equity pension system, Switzerland’s occupational pension framework and the prevalence of private investment accounts in the United Kingdom.
He urges Germany to seize the opportunity to build a “Social Capital Market Economy” through bold reforms. Leithner contends that delaying action on pension reform would be socially irresponsible.
