How can the legal pension be maintained? Economist Peter Bofinger focuses on the self-employed — and civil servants.
Würzburg – the Apple that raises the debate about the retirement age: Shortly before the federal elections, many economists called for retirement at the age of 70. Otherwise, politicians lie not only to themselves, but also to voters, according to an expert. On the other hand, economist and former government advisor Peter Bofinger has a different view of the problem.
He referred to the German state’s pay-as-you-go system in a recent conversation focus on the internet Glossy model. In principle, it is very safe and inexpensive. The catch: it only works if all workers are involved.
Statutory pension insurance: including civil servants and the self-employed?
According to Bofinger, not only civil servants, but also independent employees should be involved. Their current exclusion from the system is “killer”. Reduces breadth and variety. Digitization will make this problem worse. Incorporating the self-employed is a “very effective solution” to relieving the increasing pressure from the pension system.
“It actually eases the public order in the long run because there are a number of self-employed people who do not provide adequate measure of old age. According to the previous model, they become a burden on the state in old age, which has to pay them basic insurance,” Bofinger said in an interview focus on the internet the end.
I retire later? Economist Bofinger sees ‘no reason to act’
The new federal government is voting right now – how much time, in Bofininger’s opinion, will it have for pension reforms? The 66-year-old sees “no reason to act” here. Referring to the calculations, it is believed that the change in the retirement age will have to be “thought about” only at the end of the decade.
He considers debates about a retirement age of 2040 or a retirement age of 70 “illogical” – and notes that projections of population growth and the number of employees could show “big errors”. In three pension insurance reports, their actual number was underestimated by as many as 4.5 million workers.
Germany’s unified pension system: “It will be more difficult with civil servants”
But what are the chances of inclusion for the self-employed? Bofinger thinks this is “realistic” for young workers. He is skeptical of people who work in the public sector: “It’s more difficult with civil servants.”
However, Bofinger clearly sees his suggestion as worth a try: “If you start politics now, you’ll have twenty extra cohorts of young people in the statutory pension in the forties – when things get financially tight for the pension system,” he asserts.
Former pension-level economist: Distance to basic security matters
Bofininger sees great alternatives to repairs in focus on the internet– Interview No: “There are not many factors: increased contributions, lowered the level of pensions and increased federal benefits. When in doubt, I am in favor of paying higher pension contributions.”
Because, according to his clear warning: “If the level of the pension falls too low, there is a danger that the statutory pension will lose its legitimacy” and basic social security.
Peter Bovinger on Special Aging Service: ‘We definitely need both’
However, Bofinger still considers the existence of a private pension plan and additional companies necessary: ”Anyone who currently earns 100 percent of the median income must work for about 30 years in order to achieve the basic level of security.”
Bofinger suggests that the state could step in with subsidies: “I’m thinking of real estate. If I bought an apartment as a retirement plan, it could be funded in the same way as a savings plan through my employer.”
Bofinger is Professor of Economics at the University of Würzburg. From March 2004 to the end of February 2019, he was a member of the expert council for assessing macroeconomic developments. (mare)
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