In today's socio-political discussion, there are only a few topics that are as complicated and complex as the question of how the pension system can be made sustainable and intergenerational in the future.
The studies that have been carried out in Germany on “financial literacy”, i.e. the ability to deal with financial questions, show that many people have problems with the assessment of financial products and the way in which financial markets work.
This suggests that there is only a small part of the population who sees through the pension problem and can do something with the proposals of the parties.
It is a hallmark of our time that the world in which we live is rapidly becoming more complex and less transparent for the individual.
A reduction in complexity is required in order to enable citizens to vote rationally on the best possible future design.
Narratives play a central role, i.e. simple stories that are reduced to the essentials and represent complex relationships in an understandable way.
People depend on political narratives because they give them orientation and help them make decisions in otherwise unmanageable situations.
Norbert Bluem's narrative obscured the state of the pension insurance
There are good and bad narratives, depending on whether they simplify or distort.
In the history of the statutory pension, Norbert Blüm's narrative, which consisted of the simple sentence "The pension is safe!", Was dominant for a long time.
The more clearly demographic change became apparent, the more this narrative obscured the real situation instead of providing a meaningful simplification of the situation.
Its diminishing power led to intense discussions in the 1990s, from which a new narrative was born.
This has a catchy name: "Riester pension".
It is linked to the story that you can no longer rely on the statutory pension alone and have to save yourself in order to be cared for in old age.
The state helps to ensure that this succeeds, so the punch line.
This narrative was very successful at first.
Many people have signed Riester contracts, but the complexity of the subject has caught up with them.
The products that the financial world has offered savers were often not only complicated and intransparent.
They were also often economically disadvantageous because their investments achieved only a low return and the funding was used up by excessive closing and administrative costs.
Today, Riester stands for risk and lack of transparency
Narratives arise in social communication, and Riester contracts no longer have a good reputation there. The content of the narrative has changed. Today “Riester” stands for risk and lack of transparency, and the punch line is that it is better to keep your hands off that. It seems hopeless to organize a reform under the old label that will find acceptance. You will not be able to change the content of the Riester narrative in a positive way. A new narrative is needed for a new approach to pension policy.
With the concept of the “Deutschlandrente”, we presented a proposal in 2015 that takes into account both the supply and the demand side of the market for private old-age provision. On the demand side, we diagnose the core problem in the fact that there is little willingness to consciously deal with one's own retirement provision. On the one hand, this is an expression of the high level of complexity. On the other hand, people shy away from making decisions that are certain to generate costs today, but whose future returns are highly uncertain.