In the discussion about a reform of pension insurance, the Bundesbank proposed a long-term increase in the retirement age to more than 69 years. This is to prevent the pension level from falling too low in the future. The Bundesbank justified its proposal with the expected increase in life expectancy. "Due to the demographic development, pay-as-you-go statutory pension insurance will come under considerable pressure in the future, especially from the mid-2020s," notes the central bank in its monthly report for October.
Since 2012, the age limit for receiving the statutory pension has gradually been raised from 65 to 67 in 2031. However, according to the experts, this will not be enough, because from the mid-2020s the baby boomers will reach retirement age.
In order to keep the system stable, there is therefore "need for adjustment in the central parameters of pension insurance", write the economists. An important starting point for further reforms is the retirement age.
"Raising retirement age with increasing life expectancy"
The Bundesbank therefore suggests raising the retirement age to 69 years and four months by 2070. International organizations such as the European Commission, the IMF and the OECD also suggested "raising the retirement age with increasing life expectancy", the report said.
According to the proposal of the Bundesbank, in 2001, born in the year 2001, they would retire regularly at the age of 69 and four months. Such an adjustment would not only relieve the pension fund, argued the central bank. "It would also increase macroeconomic potential through higher employment and thus support the tax base and social contributions."
The Federal Government's latest pension package secures the level of protection at 48 percent by 2025 - this describes how much a standard pension is worth in comparison to an average income. In addition, by 2025, the contribution rate to the pension insurance should not rise above 20 percent of income. Experts, however, expect a sinking pension level and rising contributions, if not countered.