It would mark a genuine shift in the system: a statutory capital pension is intended to stabilise the German pension scheme. As fewer and fewer contributors are having to finance ever-higher pensions for longer periods, the federal government will step in with around €128 billion in 2026 – otherwise the contribution rate would have to rise to 24–25 per cent. However, fiscal scope is limited: taxes cannot be raised at will without hampering growth, investment and employment. Yet politicians, lobbyists and economists are already loading this new instrument with myths and inaccurate forecasts.
Episode 20 of “Für eine Handvoll Euro” takes a critical look at the funded pension scheme – including what a larger capital stock with concentrated risk could mean for the property market and old-age provision – and what it cannot achieve.
Germany is facing a major pension reform: soon, employers and employees will probably have to contribute an additional 2 percentage points of their wages between them. The aim is to use the revenue to build up a capital stock that will generate good long-term returns on the capital market for future pensioners. Ever since this plan was announced, many people have pointed out all the wonderful things that the move towards a capital market-based pension could bring. Join Prof. Dr Schlotmann on a brief journey through the world of capital market-based pensions.
And one more thing: the podcast is now available not only on YouTube (external link, opens in a new window), but on all major podcast platforms – for anyone who prefers to use Apple (external link, opens in a new window), Spotify or (external link, opens in a new window)Podigee (external link, opens in a new window). You can also find out about new episodes via the website of the Faculty of Law, the Brunswick European Law School (BELS).