GERMANY – The government has cheered the results of a new study showing that in mid-2004, around 60% of German salaried employees owned some type of corporate pension.
“The results show occupational pensions in Germany have turned out to be a success story,” the German social affairs ministry said.
“Following our improvement of the legal environment in 2001, the second pillar has overcome its stagnation and is currently on a stable growth track,” it added.
At the end of 2001, the government enacted the so-called Riester pension reforms, which gave German salaried employees the legal right to participate in a defined-contribution scheme.
The reforms also provided subsidies for second- and third-pillar pensions.
Expressed in number of persons, the study said that on June 30 2004, 15.7m employees owned a corporate pension, including 10.3m in the private sector and 5.4m in the public sector.
The study was conducted on behalf of the social affairs ministry by the research firm TNS Infratest Sozialforschung.
The study further said that at the end of March, 4.4m people had signed up for subsidised third-pillar pensions known as the Riester-Rente.
In view of the study’s findings, the ministry hinted that making pension saving of any kind mandatory was not currently on the cards. “What all this means is that government has gotten much closer to its aim of promoting second- and third-pillar pensions on a voluntary basis.”
Indeed, senior officials from the emerging Conservative-Social Democrat government yesterday ruled out mandatory pension saving.
Several pension experts like Professor Bert Rürup have called for the measure on the corporate level, arguing that employees – in particular lower-salaried ones – are not doing enough to compensate for the shrinking first pillar.
Separately, officials from the new government also agreed yesterday that in 2006, the state pension benefit – drawn by 20 million people – would be frozen for the third consecutive time.