Risks and opportunities: Traffic light's pension package II under criticism

Risks and opportunities: Traffic light's pension package II under criticism

With the pension package II, the traffic light coalition plans to strengthen statutory pension insurance. Labor Minister Hubertus Heil and Finance Minister Christian Lindner presented Pension Package II, the central element of which is “generational capital”. It aims to increase the pension fund in the 2030s through capital market income and thus relieve the burden on contributors. This involves taking on new debt and investing 12 billion euros in the capital market, with the aim of expanding this capital stock annually to provide 200 billion euros for the pension fund by the end.

The critics point to a potential problem if the stock market doesn't perform as expected. In the worst case, the state could suffer a loss, which would lead to less money for pension insurance. The risk could be lower if Germany had started stock pensions earlier. Financial experts emphasize that long-term and diversified investments make sense and that positive returns can be achieved over a longer period of time.

With pension package II, the stock pension carries a significant risk for the pension, as does the German pension insurance. The pension reform could provide some relief, but whether the contribution rate can be stabilized depends on expectations regarding investment returns. Experts express concerns that the planned capital will not be enough to adequately finance the pensions of the baby boomers. Jochen Pimpertz from the German Economic Institute in Cologne was critical and emphasized that the “generational capital” would be far from sufficient to cover the missing pension insurance income.