Germany Faces Long Road Ahead to Reduce Reliance on State Pension
24 October 2012 (PLANSPONSOREurope.com) – Attempts to reduce Germany’s excessive reliance on the state pension for its citizens’ retirement incomes are likely to have a minimal impact, according to research
Data from pension provider Deutsche Rentenversicherung reveal 84% of Germans’ retirement income is from first pillar prediction, for those currently aged 65-70.
In a bid to reduce this, the government has introduced a staggered increase in the retirement age can be drawn, from 65 to 67 between 2009 and 2029, and is considering auto-enrolment on similar lines to the UK.
But the Deutsche Rentenversicherung figures calculation the retirement age reform will only reduce reliance on Germany’s state pension by around 3%, by 2025.
And Christian Rub, director at pension consultancy Gbr, told PLANSPONSOR Europe even if Germany followed the UK in introducing auto-enrolment major reductions in reliance on state pensions would not be felt for 20-30 years.
“Not much will change in the average income differentiation between the three pillars for current pensioners because they will not get any benefit from auto enrolment now,” he added.
For more on Germany’s longevity problem see: http://www.plansponsor.com/Europe/MagazineArticle.aspx?id=6442489435&magazine=6442489430