The Pestel Institute has entered the debate surrounding working life and retirement with a proposal aiming to address inequalities within the pension system. Researchers suggest a differentiated approach to retirement ages and benefit levels, acknowledging disparities in life expectancy linked to income.
The Institute argues that civil servants should, on average, work five and a half years longer than other workers, reflecting their statistically longer life expectancy. This proposal stems from analysis demonstrating a correlation between socioeconomic status and longevity. According to the Institute’s findings, individuals with lower incomes tend to have shorter lifespans, meaning they receive pension benefits for a shorter duration. Conversely, higher earners statistically live longer, benefiting from larger pensions over an extended period.
Data from the German Institute for Economic Research (DIW) supports these claims. A 2021 study indicates that male civil servants aged 65 have a life expectancy of 21.5 years, while male workers of the same age have a life expectancy of 15.9 years – a difference of approximately five and a half years. The gap between male employees and civil servants is just over two years. High earners demonstrate a 6.3-year higher life expectancy compared to low-income earners, a difference attributed to greater access to healthcare and a prevalence of less physically demanding jobs.
The Pestel Institute contends that current pension discussions inadequately address these factors, leading to systemic inequities. Researchers propose a two-pronged solution: increasing pension benefits for low-income earners and introducing a progressive adjustment to higher pension payments. While extending the working lives of civil servants is one potential remedy, the Institute suggests a “social scaling” of benefits-increased payments for low earners-could be implemented without requiring any individual to work longer. Alternatively, a cap or reduction in the rate of pension increase for high earners could also contribute to greater fairness.
