Germany’s Rürup wants civil service pension cuts
GERMANY - Professor Bert Rürup, the government adviser on pensions, has provoked the anger of German civil servants by urging the government to cut their pension benefits by one-sixth.
Rürup said the cut was appropriate considering that over the next 25 years, people in Germany drawing the normal government pension would see their purchasing power decline by that magnitude. The economist made the remarks in the German press.
Germany currently has 20 million pensioners against a total population of around 80 million.
Rürup’s call comes amid a new report from the German interior ministry indicating that the pension costs for civil servants have skyrocketed over the last three decades. According to the report, the costs have risen more than four-fold to €34bn in 2002 from €6.6bn in 1970.
The costs are likely to continue their steep rise. According to the report, the number of retired civil servants will almost double to 8.6 million by 2040 against 890,000 now.
Peter Heesen, head of the German Association of Civil Servants (dbb), said that if the government went along with Rürup’s proposal, “this would be a breach of our contractural agreements with Interior Minister Otto Schilly”.
“The Social Democrat-Green government should think very carefully about going along with the proposal,” Heesen threatened, without being more specific. Theoretically, German civil servants could retaliate by mounting a legal challenge or calling a strike.
However, a spokesman for the dbb said Rürup’s proposal was a moot point, as the current government was on the verge of cutting the pension benefit for civil servants anyway.
He said a government draft law limiting the maximum benefit to 71.5% of previous salary was currently before the Bundesrat, or upper house of parliament.
“All indications are that the law will be approved, though the question is when,” he said, adding that it probably would not be before new federal elections are held in September.