GERMANY - Revenues for Germany's state pension scheme rose sharply in the first half of 2006, relieving financial pressure on the scheme and prompting some experts to question the government's plan to increase the statutory pension contribution on January 1 2007.
According to the Deutsche Rentenversicherung, the scheme's administrator, revenues in the period rose €9.3bn to €78.1bn.
The DRV said the increase was due both to Germany's current economic recovery and to the fact that since the start of the year, employers were paying their share of the pension contribution earlier than before. The contribution, a payroll tax equalling 19.5% of salary, is split between employers and employees.
Berlin-based DRV said that as a result of the higher revenues in the first half, the scheme's liquidity rose to €7.2bn at the end of June compared with €1.8bn at the end of December 2005.
Meanwhile, the sustainable reserve, used to cover short-term deficits in the scheme, swelled to €6.9bn - above the legal minimum of €3.2bn. By the end of 2006, the DRV expects the reserve to total €6.6bn.
Jürgen Geske, head of financial planning at the DRV, also said the scheme's improved finances mean that government's planned 0.4-percentage point increase in the statutory contribution may be larger than necessary. An increase of just 0.2 percentage points may be more appropriate, Geske said.
But a spokesman for Germany's pensions ministry said that despite the DRV's figures, which he called "preliminary", the government had no plans to rethink the planned increase in the contribution.
"We don't make policy based on daily events. We have to take the long view and that is there are no current plans to review the planned increase in the pension contribution," ministry spokesman Christian Westhoff told IPE.
The pension scheme's current financial situation contrasts with that of last autumn, when the government was forced to bail it out with €500m taken from tax revenues.
The scheme's finances are being boosted by the current economic recovery. This year, economists expect German GDP to grow around 2% and the number of jobless to sink to 4.5m - 300,000 less than in 2005.