GERMANY – The budget committee of Germany’s parliament (Bundestag) has urged the government to create a pension fund for federal civil servants instead of, as now, financing their pensions via tax reserves.

The government currently spends €8.5bn a year to pay pensions for federal civil servants, who also include judges and soldiers.

To reduce this expenditure, budget committee MPs suggested that the government set up a pension fund from January 2007 that all new civil servant hires would contribute to.

The chances that the government will take the MPs’ suggestion seriously are good, as they are members of the governing centre-right CDU/CSU and centre-left SPD parties. A spokeswoman from the interior ministry in Berlin was not, however, available for further comment.

In 1996, the government of Rhineland-Palatinate set up a pension fund for that state’s civil servants.

Separately, the Bundestag – where the CDU/CSU and SPD have a super-majority – approved a draft law that bars cuts in the state pension benefit until at least 2009. The measure will now take effect.

However, the benefit, currently drawn by 20 million people, is also not to rise before 2009. In addition, the statutory contribution to the state pension scheme – split between employers and employees – is to rise to 19.9% from 2007 against 19.5% now.

Prior to the Bundestag vote, German pensions minister Franz Müntefering summed up progress since the historic Riester reforms of 2001, which greatly boosted corporate and private pensions.

Müntefering said that since the reforms, 15.7m employees now had access to some sort of corporate pension, while 5.7m people had signed up for the ‘Riester-Rente’, the tax-privileged private pensions.