GERMANY - Half of the population in Germany is opposed to the idea of being forced to save for retirement either on the corporate or private level, according to a new study unveiled by German independent financial adviser MLP.
But the study, compiled for MLP by the pollster Allensbach, revealed a narrow gap between opponents and supporters of the idea. Of the almost 1,500 people queried, 34% said mandatory retirement saving was a good idea.
MLP said the fact that 50% rejected the idea was down to two factors. First, they did not want to be compelled to buy a complex product like the Riester private pension, and second, many were still not aware that their state benefit had been reduced, MLP said.
Following three major pension reforms since 1997, the maximum state pension benefit will decline to 43% from 2030 compared with 52% currently.
The Riester pension reforms of 2002 gave employees the right to a defined-contribution (DC) plan at work and created a new third-pillar pension. The DC plan and the private pension are tax-privileged, though the former’s exemption from social taxes is to expire at the end of 2008
Demand for the pensions has, however, been below what it should be to make up for the crumbling first pillar. This has prompted leading pension experts like Professor Bert Rürup to call for a semi-mandatory DC scheme.
According to Rürup, the onus would be on the employer to set it up instead of, as now, on the employee. The employee could then decide to opt out of the scheme.
The government is to decide whether retirement saving will be made mandatory or not in 2008, when demand for the Riester pensions is reviewed.
Separately, German insurer HDI has released a study contradicting an earlier one by Allensbach which found that many of Germany’s small and midsize enterprises (SMEs) do not offer a corporate pension.
The study from HDI said that only 6% of SMEs did not offer a corporate pension, adding that for the rest, a pension was most often offered in the form of a Direktversicherung, or direct insurance contract.
Yet while the Allensbach study encompassed 1.6m SMEs, the one from HDI had only 100 SMEs, raising questions about how representative it is.