According to Marcel Fratzscher, President of the German Institute for Economic Research (DIW), the recommendations put forward by the Pensions Commission are unlikely to be sufficient to stabilize the national statutory pension system. Speaking to the “Rheinische Post,” he noted that while the reform proposals were headed in the right direction, they were overall too cautious.
Fratzscher argued that the proposals lacked “courage and consistency” because they failed to fundamentally address the three largest ongoing issues: high old-age poverty, the excessive burden placed on the younger generation, and existing imbalances in fairness.
While acknowledging several smart and correct elements in the commission’s work-such as raising the retirement age, introducing a funded pension scheme, and reducing early retirements-Fratzscher cautioned that the commission did not possess the resolve to implement necessary changes decisively and quickly. Furthermore, he criticized the proposals for failing to fundamentally alter the high level of old-age poverty, which he predicts will continue to rise.
Calling for improvements from the government, the economist emphasized the difference between suggestion and decision. “The Pensions Commission only makes suggestions; politics must make the decisions,” he stated. He urged that the proposals be refined to strengthen and make the basic pension more robust, adequately consider large incomes and wealth in retirement, and place the financing on a more sustainable footing.
