Pension experts have raised concerns regarding the planned reduction of the federal subsidy for the pension insurance proposed by Finance Minister Lars Klingbeil (SPD). Franz Ruland, former managing director of the Association of German Pension Insurers, stated to Spiegel that a €4 billion cut in the federal subsidy would necessitate raising contribution rates by 0.2 percentage points. However, Ruland indicated that he believes the pension insurance will initially draw down its existing reserve fund, which currently exceeds 40 billion euros.
Axel Börsch-Supan, a Munich-based pension expert and emeritus director at the Max Planck Institute for Social Law and Social Policy, warned that such a cut would unfairly burden the entire insured community. According to Börsch-Supan, reducing the federal subsidy would only be appropriate if the federal government simultaneously reduced non-insurance-related benefits. He pointed out that the opposite is currently happening, citing the recent extension of the mothers’ pension in December as an example.
Furthermore, Börsch-Supan criticized the scheme for contradicting the coalition’s initial intention to lower the overall contribution rate. He concluded that the proposal lacks coherence, stating, “Nothing about this fits together; a strategy is missing”.
