The impact of a proposed pension portal displaying German savers’ entitlements across all three pillars of the pension system is being overstated and will likely only result in a greater administrative burden for providers, employer association BDA has said.
Outlining the four main parties’ manifesto pledges on pension policy ahead of this weekend’s federal election, BDA executive board member Alexander Gunkel expressed satisfaction that chancellor Angela Merkel’s CDU/CSU had committed to resisting any European Union-imposed changes to the German system – such as the introduction of a Portability Directive, allowing for first-pillar pension rights to transfer from member state to member state.
Gunkel said the CDU proposal to introduce an information portal centrally collating all German workers’ pension entitlements – echoing similar projects in the Netherlands and Denmark – would be “a ‘nice to have’ rather than something that will lead to significant change”.
“The CDU/CSU believe the platform will lead to people being better informed about retirement savings, and, when they see how much they have saved, they will put more aside,” he told the annual conference of the German industry pension association (IPV) in Berlin.
“The impact of the tool is being overstated, but if there are easy ways to organise it, it could be helpful. We view the project with some concern because it will undoubtedly lead to more bureaucracy for the affected providers, with only a questionable positive outcome.”
Gunkel also said proposals from the opposition SDP to shift the cost burden of occupational pension (bAV) contributions further onto companies were based on a lack of understanding of the system by the social democrats.
But he welcomed proposals for a higher minimum state pension that has been suggested under different guises by the CDU, SPD and Green Party.
He noted of the CDU proposal of the €850 monthly state pension payment – which would be based on at least 40 years of contributing to the Deutsche Rentenversicherung – would also boost the bAV, as the union’s proposals would take into account any additional savings a worker may have made.
However, Gunkel warned that any incoming government must tread carefully in attempting to reform pensions, noting that the coming four-year legislative period would be the last that would see the majority of Germany’s baby boomers in employment.
He said: “We must be very careful the coming legislative period does not see the wrong decisions made affecting the German Rentenversicherung, and also that preparations for a future-proof three-pillar pension model is not made more difficult, or even impossible.”