As part of the proposed retirement reform, the German Trade Union Confederation (DGB) is advocating for a mandatory company pension scheme to serve as supplementary old-age security, requiring employers to make contributions.
Yasmin Fahimi, the chairwoman of the DGB, informed the Redaktionsnetzwerk Deutschland that the union supports establishing “a mandatory occupational pension provision for everyone, and we [the unions] will be involved as collective bargaining parties.” She emphasized that this supplementary security must be co-financed by employers.
Fahimi pointed out that approximately 20 million employees in Germany currently do not have access to an employer-provided pension plan, largely because they are employed within companies that are not subject to collective bargaining agreements. The unions are prepared to regulate this on a collective basis for all workers through contracts. Furthermore, she suggested that under specific conditions, employees of non-unionized businesses could be integrated into existing models.
While concrete details regarding the rollout were promised by Fahimi soon, she stressed that employer financial responsibility is non-negotiable. She made it clear that the occupational pension scheme cannot fall unilaterally on the shoulders of the employees. Therefore, forcing workers to contribute alone and subjecting them entirely to the insurance industry is deemed counterproductive.
Anticipating potential backlash given the current strained financial and economic climate, Fahimi preempted criticism regarding increased contributions. However, she countered by observing that in most European countries, mandatory pension contribution rates reach 20 percent or more-significantly higher than Germany’s current rates. She noted that frequently, the employer’s share of these payments is even greater than what the employees contribute, characterizing the proposed approach as highly rational and practical.
