Pension contributions increase: share pensions are intended to relieve the burden on employees

Pension contributions increase: share pensions are intended to relieve the burden on employees

The pension system in Germany is facing financial challenges due to the aging population. With Pension Package II, the traffic light coalition is planning measures to stabilize pensions. Due to the imminent retirement of the baby boomer generation, more and more pensioners will meet fewer and fewer people in employment, which will put the German pension system under pressure. Pension Package II aims to maintain current pension levels for seniors, but the question arises as to how younger workers will cope with the increasing financial burden.

According to the plans of the pension package, the pension contribution rate is to rise from the current 18.6 percent to 22.3 percent by 2045 in order to secure the pension level of 48 percent in the long term. In addition, the government plans to invest at least 200 billion euros on the capital market by the mid-2030s to support the pension fund. The planned generational capital or stock pension is intended to stabilize the pension contribution at 22.3 percent by 2045 with the help of annual distributions of ten billion euros from the 200 billion euro capital amount and relieve future contributors.

From 2028, employees can expect an increase in pension contributions, which will gradually rise to over 22 percent in 2035. However, these planned measures have met with criticism from employers' president Rainer Dulger, who warns that the state and society will be massively overwhelmed. Dulger describes the pension package II as the most expensive social law of the century and calls for the plans to be stopped because, in his opinion, it would be unfair and unjust to spend an additional 500 billion euros on pensions over the next 20 years.