Concerns Over the Future Viability of Germany's Social Systems

A recent survey indicates that a significant majority of Germans are skeptical about the adequacy of measures taken by the government to ensure the sustainability of social security systems. According to a Forsa poll commissioned by the Federal Association of German Employers' Associations (BDA), 90% of respondents believe that the current arrangements are insufficient for the future.

Only a mere 7% of participants feel that adequate steps have been taken to secure the financing of these systems moving forward. The survey, which included 1,006 individuals aged 18 and older, was conducted on March 13 and 14, shortly after the Union and SPD unveiled their joint exploratory paper for a future coalition.

Rainer Dulger, President of the BDA, emphasized the need for the incoming government to actively pursue necessary reforms and capitalize on the prevailing sense of optimism. The poll revealed that more than two-thirds (69%) of those surveyed view the proposal for an 'Equity Pension'--whereby the state invests funds for pensions in the capital market--as a beneficial initiative. In contrast, only minorities support increasing pension insurance contributions (27%), raising the legal retirement age (18%), or reducing the statutory pension (5%).

Dulger stated that the pension system must adapt to demographic realities, advocating for the cessation of early retirement incentives and a gradual increase in the retirement age. He proposed financial incentives, such as the 'Active Pension,' to encourage continued employment beyond the legal retirement age, suggesting that individuals who work past this age could earn up to EUR2,000 per month tax-free.

However, the exploratory document does not mention the 'Equity Pension' initiative. Instead, it includes the Union's proposal for a 'Early Starter Pension,' which suggests that every child aged between six and 18 should receive a monthly payment of EUR10 from the state into a personal capital market account as a form of 'starting capital.'