Just prior to a decisive cabinet session scheduled for Wednesday, 46 German economists have strongly warned the Federal Government against attempting to revise the recommendations put forward by the Pension Commission. In an appeal reported by the “Handelsblatt”, the academics are particularly opposing any consideration of altering the planned expiration of the tax-free “Retirement with 63.”
The signatories of the appeal include Constanze Janda, co-chair of the Pension Commission, and Monika Schnitzer, chair of the Advisory Council for Monitoring Overall Economic Developments. Other contributors to the group are economists such as Clemens Fuest (Ifo Institute), Martin Werding (Ruhr University Bochum), Jörg Rocholl (ESMT Berlin), and Moritz Schularick (Kiel Institute).
In their plea, the economists stated that the Commission’s recommendations constitute a consistent package of measures. They emphasize that changes concerning the age of retirement, an elevated sustainability factor, the inclusion of additional groups, and a statutorily mandated capital pension achieve a positive and stabilizing effect only when implemented as a whole.
The paper points to data from the Pension Insurance organization, which indicates that the tax-free early retirement scheme frequently benefited higher earners, healthier individuals, and men. Instead, the Pension Commission aimed to provide more targeted support to those who cannot work for health reasons, as well as to pensioners who struggle financially despite having made many years of contributions.
The academics issued a clear warning to the government: “If individual components are cut, a viable replacement must be named. Otherwise, the entire concept will collapse.”
