The Union – the German coalition between the Christians Democratic Union (CDU) and the Christian Social Union (CSU) – will work to design a new concept of capital-funded pensions structured on a monthly contribution paid by the state into a Penisonsfonds for investments.

The notion, called Generationenrente – generational pension – is part of the electoral programme “for the stability and modernization” of Germany presented to the public yesterday.

The aim of the Generationenrente, which mirrors the idea of a ‘child pension’ pitched by CDU member Kai Whittaker a few days ago, is to fight old-age poverty with a “mix of instruments”, according to the Union’s electoral programme.

The Union also plans to re-assess the social partner model to remove possible obstacles to improve its take-up. So far, only one of such occupational pension agreements has been concluded between the insurer Talanx and the union Ver.di.

The idea of a “company pension scheme for all” goes in the same direction of further spreading occupational pensions, particularly among low-wage earners, it said.

The CDU/CSU alliance envisions a “fresh start” for the private, state-subsidised old-age provision to make it “more efficient, more transparent and therefore more attractive”, it said.

It will establish criteria to set up a standard private pension product mandatory for all employees but with the possibility to opt-out. The administrative costs for the standard product should go down to a minimum – the state should offer “attractive and unbureaucratic” subsidies.

Products with a guarantee on benefits should be offered alongside products without guarantees, the porposal added.

The CSU/CSU coalition expects that the measures lead to an increasing amount of people opting for private pensions. The Union will expand the product portfolio to include a state-sponsored, private standard pension product if expectations are not met, it said.

The Union reiterated in its electoral programme the reliability of the three pillars of the pension systems including pay-as-you go, occupational and private pensions. But it added that, especially for the generation that is currently saving for pensions, the trust in the statutory system has to be reinforced with a clear perspective that will last for the next 30 years.

For this reason it wants to turn the Social Advisory Council, an advisory body to the government now responsible only for the statutory pensions, into an advisory body that will look at the three pillars of the country’s pension system.

To help employees reach retirement age at 67, CDU and CSU support strengthening medical and occupational rehabilitation after an illness or an accident, and an increase in benefits for people who decide to move from a disability pension to an old-age pension.

The suggestion of a Scientific Advisory Board at the Federal Ministry for Economic Affairs and Energy to push retirement age to 68 based on life expectancy and a flexible retirement age were not mentioned in the electoral programme.

The programme also included a proposal to introduce a mandatory pension for self-employed who are not already covered by other forms of insurance.

Abundant criticism

The Union has recently built up a lead in the polls, ahead of The Greens, the Social Democratic Party (SPD) and the Free Democratic Party (FDP), almost three months before the general elections taking place on 26 September.

Its electoral programme has, however, attracted harsh criticisms from competitors in the political campaign to win over votes.

The candidate for the Green party, Annalena Bearbock, has described the CDU/CSU programme as “anti-social”. The general secretary foe the SPD, Lars Klingbeil, accused the Union of “social coldness”.

The magazine Der Spiegel called the electoral programme “valium for the nation”, far from a vision for the future of the country.

The public broadcaster ARD noted the “vague” financing plans to fund such proposals, especially after a wave of public spending to contain the consequences of the COVID-19 pandemic on the economy.

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