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German Plan Sponsors Should Confront Staff Reality of Retirement Poverty

31 August 2012 (PLANSPONSOREurope.com) – German plan sponsors need to use retirement planning tools so employees can face up to the likelihood of poverty in retirement, according to Towers Watson.

German newspaper the Süddeutsche Zeitung published figures this week revealing the number of German pensioners working “mini-jobs” to supplement their income had increased by 60% since 2000.

In 2000, 280,000 pensioners held the €400-a-month jobs, which are exempt from taxes and national insurance contributions. The figure has now risen to around 761,000.

Ernst Schmandt, senior international consultant at Towers Watson, told PLANSPONSOR Europe: “It is question of do we have enough retirement planning decision tools? Do companies provide sufficient information to make a good decision?

“One of the challenges and opportunities to companies is not only to have a pension plan to communicate effectively future earnings and what is required to sustain their current standard of living beyond 65. There is more homework to do by companies.

“Companies have the opportunity to transmit messages by calculation tools which illustrates what happens if you don’t save.

“Everybody is working at a computer so it should be easy. Retirement income calculators are pretty easy to handle and understand. It shouldn’t be a problem to illustrate what happens if you just rely on the social security pension.”

PLANSPONSOREurope Staff
editors@plansponsoreurope.com





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