Ahead of the release of the Pension Commission’s report on Tuesday, German employers express little optimism that the Federal Government will successfully implement the necessary major reforms to the pension system. This sentiment comes from a recent survey conducted by the employer association BDA, as reported by the news portal T-Online.
According to the survey of around 1,000 companies, more than three-quarters (77%) anticipate that the Federal Government will not launch “fundamental reforms to the pension system” during the current legislative period. Only 16% believe such a reform will be successful. Nevertheless, the BDA employer barometer highlights the critical importance of the reform to businesses: 91% of the companies surveyed by Forsa agreed that “fundamental reforms are necessary” so that the statutory pension insurance can financially cope with the aging population.
Rainer Dulger, President of the Employers’ Association, told T-Online: “The reality is that without structural reform, pension contributions will increase significantly. Our pension system cannot withstand the demographic pressure. This is mathematics, not an opinion.” Dulger noted that an increasing number of retirees would have to be financed by an ever-shrinking pool of contributors. He warned that those who ignore this truth only postpone the issue and make it more expensive.
Regarding the low confidence among businesses in the government, Dulger stated that the government can only counter this mistrust “through fast, visible action instead of further announcements. The trust is now in their hands.” He simultaneously called for raising the standard retirement age for the statutory pension. “It is correct that the recommendations of the Age Security Commission are now arriving. The direction is clear: those who live longer and receive pensions for longer must also work longer.” Otherwise, he stressed, the consequences will be rising contributions, lower net pay relative to gross pay, and an additional burden on an economy fighting to sustain itself. Germany needs a retirement age that grows with life expectancy, alongside the end of the current provision for tax-free early retirement.
