Debate about retirement at 68 Altmaier cashes in on plans from his advisors

As of: June 8th, 2021 3:33 p.m.

Work until 68 – this proposal from the Advisory Board of the Ministry of Economic Affairs creates massive headwinds. After the rejection of the coalition partners CSU and SPD, Altmaier now expressed himself: The retirement age is currently not an issue. Federal Minister of Economics Peter Altmaier has rejected an increase in the retirement age to 68 years, as recommended by an advisory committee of his house. The retirement age was set at 67 in the first grand coalition “at the suggestion of esteemed colleague” Franz Müntefering (SPD). “It should stay that way, that’s been my opinion for years,” wrote Altmaier on Twitter.

“Suddenly increasing financing problems”

The Scientific Advisory Board of the Ministry of Economics is independent, wrote Altmaier. His proposals are not binding on either the ministry or the minister. The Scientific Advisory Board of the Ministry of Economic Affairs – an advisory body – had proposed a reform towards the retirement age at 68. Because there was a threat of “sudden increasing financing problems in the statutory pension insurance from 2025”. The retirement age cannot be decoupled from the development of life expectancy in the long term.

CSU and SPD against raising the retirement age

The CSU also rejected ideas about raising the retirement age to 68 years. “We reject a later retirement age,” said CSU regional group leader Alexander Dobrindt. In order to make pensions more secure, an “effective reform of private provision is required,” he said. This must be “more successful and efficient,” said Dobrindt. The SPD had previously rejected an increase in the retirement age. He thinks this is the wrong way, said the federal labor minister responsible for pensions, Hubertus Heil, according to a statement from his ministry. The statutory pension is a central promise of the welfare state. It is about recognition of lifetime achievement and security in old age. “Everyone must be able to rely on that.”

“Unsocial, what is proposed there”

SPD parliamentary group leader Rolf Mützenich said that a new regulation for a possible entry age of 68 does not go with the SPD. “Pensioners and the generation that will retire in the next few years must not be further unsettled.” That will also play a role in the federal election campaign. SPD Chancellor candidate Olaf Scholz said: “I stand for the fact that we are not discussing any further increase in the statutory retirement age.” Scholz spoke of a “horror scenario” which should serve to “implement pension cuts for which there is no reason at this time”. According to Scholz, not only are the calculations wrong in the report. “What is being proposed there is also anti-social,” said the minister.

Advisory board proposes retirement at 68

The representatives of the Union and the SPD reacted to an opinion from the Scientific Advisory Board at the CDU-led Federal Ministry of Economics. The Scientific Advisory Board of the Ministry of Economic Affairs – an advisory body – had presented a concept that provides for longer work in old age and a limitation on future pension increases. The proposal mentioned a retirement age of 68 years in 2042. Currently, the rule applies that the age for entry into retirement without deductions should increase to 67 years by 2030. The advisory board warned that the pension system would head for a “financing shock” without further increases.

Employer President: “Lead honestly” pension discussion

Employer representatives were open to the experts’ suggestion. Employer President Rainer Dulger said with a view to demographic development that one should not get into a situation in which there are more service recipients than service providers. “The discussion must be conducted and it must be conducted honestly,” said Dulger. The topic cannot be concluded with stubborn rejection. People who would like to work longer should also be included in the discussion.

DGB and left indignant

The SPD gets a tailwind from its criticism from the German Trade Union Confederation (DGB) and the Left Party. The advisory body wants to “drastically cut pensions, dismantle the welfare state and privatize old-age pensions – all of this to massively relieve employers,” said DGB board member Anja Piel of the “Neue Osnabrücker Zeitung”. She accused the body of announcing the imminent ruin of the state on the basis of a fictitious legal status in order to then justify radical reforms. This is not scientifically based advice, but political propaganda. “From this oblique perspective, those affected are to blame if the pension is not enough: they could have made more private provisions,” said Piel. Left party leader Susanne Hennig-Wellsow spoke of an “asocial Oberhammer.” The left will “defend the rights of pensioners with tooth and nail”. What would be necessary would be a clear pension guarantee that bindingly excludes pension cuts as a result of the corona pandemic, said Hennig-Wellsow.

Government advisory council proposal Will you retire at 68?

Status: 07.06.2021 6:49 p.m.

Advisors to the federal government consider it necessary to raise the retirement age to 68 years. Otherwise, the pension will soon be heading for a “financing shock”. The left reacted indignantly. Advisors to the federal government proposed a reform towards the retirement age at 68 around three months before the general election. There was a risk of “sudden increasing financing problems in the statutory pension insurance from 2025”, predicted the Scientific Advisory Board at the Federal Ministry of Economics on the occasion of its new report on the future of pensions. According to the current legal situation, the age limit for the pension without deductions will be gradually increased from 65 to 67 years until 2029. The proposal could catapult the topic of pensions more strongly into the debates ahead of the federal elections. Because the positions of the advisory board are likely to meet with rejection from the SPD, the Greens, the left and the trade unions. “This is the anti-social Oberhammer,” said left party leader Susanne Hennig-Wellsow with a view to the report. Economics minister Peter Altmaier had to “cash in immediately” the corresponding report from his advisors, “otherwise the pension election campaign will start tomorrow”. The left will “defend the rights of pensioners with tooth and nail”. What would be necessary would be a clear pension guarantee that bindingly excludes pension cuts as a result of the corona pandemic, said Hennig-Wellsow.

“Dynamic coupling of the retirement age to life expectancy”

The experts emphasized that the retirement age cannot be decoupled from the development of life expectancy in the long term. “Instead, the additional years of life must be divided according to a clear rule between working more and receiving a longer pension.” To this end, there should be a “dynamic link between the retirement age and life expectancy”. The relationship between the time spent in work and in retirement should remain constant. According to current projections of life expectancy, such a rule would reach retirement age in 2042 at 68, said the director at the Max Planck Institute for Social Law and Social Policy, Axel Börsch-Supan, who was in charge of the report. The advisory board emphasized in its announcement: “Should life expectancy decrease, the retirement age may also decrease.”

“Sharply increasing subsidies from the federal budget” necessary

By calling for the retirement age to be linked to life expectancy, the committee made a proposal that has been causing waves in the pension policy debates in Germany for years. It is illusory to expect “that higher contributions and a lower pension level can be avoided in the long term”, according to the panel of experts. In the opinion of the advisory board, “sharply increasing subsidies from the federal budget” would have to flow into the pension fund if the valid holding lines for contributions and the pension level were to be maintained. “That would be at the expense of future investments, for example in education, infrastructure and climate protection, and would undermine the sustainability of our social system,” said the chairman of the advisory board, Klaus M. Schmidt, according to the announcement. The advisory board’s proposals also include making existing pensions less dynamic than new pensions when it comes to pension increases.