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Call for cut in German civil service pensions

GERMANY- The head of the employers’ association the BDA, Dieter Hundt, has called for civil servants’ pension privileges, which can be twice as much as other workers’, to be cut.

Hundt spoke of a ‘cost explosion’ triggered by the pension provisions granted to civil servants, currently costing the state 25 billion euros. The expense was set to treble by 2030, Hundt told the German press.

A spokesman for the association told IPE that currently the highest civil service pensions can amount to up to 75% of final salary. In the next few years the threshold is expected to go down to 71.7%.

The spokesman said civil servants’ pensions could hardly compare with the standard ratio of 48% granted to “normal” workers, which could sink further under 40%.

It is the first time the Berlin-based association has publicly expressed its views of the subject, he said.

Hundt’s comments were not “a spontaneous thing” as the topic has received attention within the association, which represents up to 2.5 million employers, with a total workforce of about 20 million.

“We mention the expenses for public civil servants’ pensions because it is public money, money coming from taxes, taxes which workers and employers also pay,” he told IPE.

A spokeswoman for the interior ministry told IPE that the country has a “complex pension system” where pensions paid to civil servants are known as ‘pension’, and those paid to other employees as ‘rente’.

She said the system was far too detailed to be summed up, but added the government’s reform would include cuts for the civil service as well as other workers.

Responding to the BDA, she said it was difficult to quantify a typical civil servant’s pension as many factors were considered but confirmed the highest pension could amount to a gross 75% of their final salary.

Civil servants’ ‘pensions’ are fully taxed, in contrast with other employees’ ‘rente’, which are partially taxed.

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