To ensure the long-term financial stability of the pension system as the large birth cohorts enter retirement, Yasmin Fahimi, Chair of the German Confederation of Trade Unions (DGB), has advocated for expanding the base of contributors to the statutory pension insurance.
“We can and must stabilize the pension insurance – particularly by including more people” Fahimi stated in an interview with Funke-Mediengruppe newspapers. She emphasized the necessity of incorporating self-employed individuals into the system, highlighting that many currently rely on basic income support in their later years. She also suggested including elected officials, although the impact would be limited.
Fahimi’s strategy extends beyond simply broadening the contributor pool. She underscored the need for increased employment to generate more contributions. This, she suggested, could be achieved through sustainable integration of individuals into the labor market, managed immigration and reducing the prevalence of part-time work among female employees.
Contrasting this approach, Fahimi dismissed proposals to integrate civil servants into the statutory pension system, citing constitutional principles, legislative competence residing with the states and the unfeasibility of financing such a change.
Alongside broadening contribution bases, Fahimi called for greater federal government financial support funded through taxation. “Non-insurance related benefits must be fully financed through taxation and the effects of demographic change should be mitigated through a society-wide financial injection”. She noted that the demographic challenge is expected to lessen around 2035 as the large birth cohorts are reduced by mortality.
The DGB Chair explicitly rejected discussions about extending working lives. “Those who have worked for 45 years should be entitled to an unreduced pension” she argued, asserting that individuals have “earned their pension fairly” after that period. She questioned the fairness of a system where individuals starting work at 32 retire at the same age as those who began working at 16.
Fahimi cautioned against policies that might necessitate later retirement ages, fearing strong public opposition. She also raised concerns about the impact of rising rates of disability and long-term illness, observing that increasing life expectancy isn’t universally experienced.
Furthermore, Fahimi expressed skepticism regarding the “active pension” scheme planned by the current coalition government. She doubts it will significantly boost employment, suggesting it may primarily benefit those already working beyond the statutory retirement age. While supportive of individuals who wish to work past the retirement age, she warned against creating a situation where people are forced to work well into old age due to inadequate pension benefits.
