The German governing coalition – Social Democrats (SPD), Greens, and the Liberal Party (FDP) – have come to an agreement on the reform package ’Rentenpaket II’ that will contain the reform of the country’s first pillar pension system.

“According to my information, there is an understanding in the Rentenpaket II” that could be introduced “hopefully soon” to parliament, said Frauke Heiligenstadt, member of parliament (MP) for the the Social Democratic Party, today during an event organised by the fund industry association BVI in Berlin.

The Green Party has given its go-ahead to the pension package, listing reservations on the equity pension (Aktienrente), as the reforms of the first pillar into a partially capital-funded system is called, according to reports.

Asked if a first-pillar pension system reform will come at the beginning of the year, the MP for the Greens, Stefan Schmidt, said: “I assume so, we are in intensive talks, although I am not in the working group [for the Rentenpaket II]” to know exactly the progress of work.

With the Rentenpaket II, the government intends to reform the first pillar in the direction of a partially capital-funded system to invest taxpayers money, not contributions, in global equity in order to stabilise the level of contributions and mitigate the amount of public subsidies for the first pillar.

The equity fund – Aktienrente – will start next year with an initial funding of €12bn, finance minister Christian Lindner said.

The priority for the SPD is “always and in every case” to set out “good regulations” for the statutory first pillar pension system and for occupational pensions, so that employers contribute to building pensions for their employees, Heiligenstadt added.

The coalition parties are also working to reform the third-pillar system (private pensions) after recommendations were delivered by stakeholders last year in the Fokusgruppe Altersvorsorge.

The coalition parties are focusing on the first step to reform the country’s pay-as-you-go system, and in a second step the third pillar system, said Anja Schultz, MP for FDP, during the event.

“We want to discuss as quickly as possible about the government’s draft bill [for the third pillar reform],” added Heiligenstadt.

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