Retirement Debate

Central Bank Needs Pension Rethink

Rentnerpaar
Given the negative demographic trends, many Germans fear their pensions are at risk. Photo: DPA
  • Why it matters

    Why it matters

    The Bundesbank last week said increasing the retirement age to 69 by 2060 was necessary to stabilize Germany’s pension system. The author argues  pension reforms need to be far broader.

  • Facts

    Facts

    • The country’s birth rate is decreasing as life expectancy increases, putting massive pressure on pension financing.
    • Today there are 53 pensioners for every 100 workers paying into the public system, but the figure for retirees will grow to 68 by 2030, according to the Bundesbank’s numbers.
    • Berlin is already slowly increasing its retirement age from 65 to 67 by 2030, and has rejected the Bundesbank’s proposal to go further.
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    Audio

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Sigmar Gabriel, the head of the center-left Social Democratic Party, doesn’t think much of raising the retirement age to 69. He called it a “stupid idea.”

That’s an extremely hasty assessment of a proposal that would not be fully implemented for another 48 years. It is more likely than not that, by the end of the next decade, what will then be the legal retirement age of 67 will have to be raised once again.

And yet, the suggestion last week by Germany’s central bank, the Bundesbank, to raise the retirement age to 69 after 2060, feels more like an abstract intellectual exercise than a substantial contribution to the current debate.

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