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MIL OSI Translation. Region: Germany / Deutschland –

Source: Federal Ministry of Labor and Social Affairs The Federal Cabinet today approved the 2020 Pension Insurance Report and the 2020 Pension Insurance Report. The pension insurance report is presented annually and provides information on the financial development of the statutory pension insurance in the coming years. It is supplemented once per electoral period by the pension report, which in particular examines the benefits from pension systems and the total income of senior citizens as well as the spread of company and private pension schemes among the employed. Hubertus Heil, Federal Minister for Labor and Social Affairs:

Old-age insurance in Germany is well positioned. The 2020 pension report shows that the positive economic development of recent years has also reached the older population. On average, the net household income of older people rose by 14 percent between 2015 and 2019, which is significantly more than the price of 5 percent. The pension insurance report provides guidance for future developments: Despite the current economic consequences of the COVID-19 pandemic, pension finances are well positioned. Our regulations on short-time work and the fact that contributions to the pension are paid on short-time allowance play an important role here. The contribution rate will remain unchanged at 18.6 percent in 2021. In addition, the pension guarantee ensures that pensions will not be reduced when wages are adjusted on July 1, 2021, despite the current falling wages.

The most important results of the 2020 Pension Insurance Report at a glance: A sustainability reserve of EUR 36.3 billion is estimated for the end of 2020. This year the reserve has decreased by 4.2 billion euros, and the contribution rate will remain constant at 18.6 percent in the next two years. According to the model calculations, the contribution rate will rise to 19.3 percent in 2023 and to 19.9 percent in 2024 and 2025. The holding line for the contribution rate (not more than 20 percent until 2025) does not apply. According to the model calculations, the so-called pension guarantee applies when the pension is adjusted on July 1, 2021, so that the current pension value remains unchanged at EUR 34.19. In the east, the adjustment step as a result of the final pension transition law will result in a pension adjustment of around 0.7 percent. The actual amount of the pension adjustment will not be known until March 2021, when all the necessary data is available. The pre-tax security level is currently 48.2 percent, will initially increase in the following years and will be 49.4 percent in 2025. It should be noted here that the German Federal Pension Insurance Association has revised the statistical recording of the premiums subject to contributions, which means that the level of security is higher. But even without taking the revision effect into account, the security level in 2025 remains at 48.4 percent above the holding line of 48 percent. In the longer term, the contribution rate and security level will also be within the legal limits. is by far the pension system with the greatest importance. A good 56 million people are actively and passively insured in it, 21.1 million people receive pensions, including 18.5 million 65-year-olds and older retirees. In Germany, 89 percent of 65-year-olds and older receive their own pension from the GRV . In the old federal states it is 87 percent and in the new federal states 97 percent. In relation to the volume of old-age pension benefits, the GRV accounts for 68 percent in the old federal states and 94 percent in the new federal states. The positive economic development of recent years has also reached the older population. The net household income of all married couples and single persons aged 65 and over increased by 14 percent between 2015 and 2019, while the cost of living rose by just 5.3 percent over the same period. This shows a clear real increase in income, which roughly corresponds to the income growth in the total population. In Germany, married couples achieve an average net total income from pension benefits and additional income of 2,907 euros per month. Among the single 65-year-olds and over, men have an average total income of 1,816 euros. For women it is 1,607 euros. By the end of 2019, the number of active pension entitlements in company pension schemes in the private and public sectors had risen to 21 million. Almost 54 percent of employees have a company pension scheme, and around 66 percent of employees have an additional pension scheme, either through a BAV and / or a Riester contract. However, it has also been shown that a good half of low-wage earners have not yet made additional provisions for old age.

MIL OSI

EDITOR’S NOTE: This article is a translation. Apologies should the grammar and / or sentence structure not be perfect.

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