The coalition agreement of the new federal government never mentions Sweden by name. Yet the kingdom to the north inspired one of the more interesting chapters of the treaty. The Ampelkoalition takes on the establishment of a fund, which should use the potential of the global financial markets for old age provision; primarily it should be about long-term investments in stocks. In future, part of the pension contributions will flow into this fund; the pension payments to be paid out one day will no longer depend on the pay-as-you-go system, but will be covered by the capital that the pensioners have paid in themselves. The federal government is making an advance payment of 10 billion euros in order to start the share pension quickly.
The role model is unmistakably Sweden. The model has existed there for twenty years. The fund, which is managed by a small team from the pension authority, has fixed assets equivalent to 85 billion euros. It is mainly in stocks, and to a lesser extent in bonds. The fund has so far achieved an average annual return of 11 percent. That is the magic number that makes many observers jealous. Anyone who pursues pension policy can certainly use such returns.
A lot can be learned from the Swedish example. This concerns first of all the thrift of the state fund administrators. They are based on the large index funds and get by with a sensationally low management cost rate of 0.075 percent. In addition, the Swedes have integrated private fund providers into their system. Those who do not trust the investors from the authorities can also entrust their share pensions to Blackrock, Carnegie and Axa and thus concentrate on individual industries or continents, for example. There are around 400 funds to choose from, which have been classified as trustworthy by the pension authority. A good compromise: It would be presumptuous to prescribe investment in state government as having no alternative. But it would also be too risky to leave some unsuspecting and unsuspecting contributors unprotected to the financial sector.
Bitter pills were also part of the pension reform in Sweden
A special achievement of the Swedish pension officials is that, in return for referring around five million potential small investors, they negotiated substantial discounts on their management fees for private fund providers.
They are on average 0.3 percent, much lower than on the free market.
With so much caution, it almost goes without saying that the Swedes have also devised a mechanism to protect contributors from a stock market crash at the end of their working lives ruining their pension.
So far so cute Emulating the Swedes in these details will not cost the new German government much effort. It would take more courage to use the Swedish system as a model. Firstly, the funded part of the pension is not an additional offer there, but compulsory. Everyone has to spend 2.5 percent of their contributory income on it. Secondly, in Sweden it is not the minimum level of the pension that is set, as is the case in Germany, but the amount of the pension contribution, which is 18.5 percent in total. Third, the regular retirement age is linked to the development of average life expectancy. It is expected to increase from 65 to 67 years by 2026. Fourth, retirees in Sweden take with them not only wage increases, but also economic crises;then, at least in theory, the pension can decrease. In practice there is a rule that dampens and stretches the effect so that it is barely noticeable.
All of this was agreed by the government and opposition in Sweden at the end of the 1990s. In order to adapt the pension to demographic developments in the long term, they believed that cuts in the existing system were inevitable; To keep this sour insight out of day-to-day political affairs, they relied on non-partisan cooperation.
The new federal government, on the other hand, categorically rules out both pension cuts and raising the retirement age.
How the money will still be enough in view of the aging of society remains her secret.
That the contributions of more working women and migrants will fill the gap is just a vague hope.
And the funded supplementary pension alone will not fix it.
In addition, Germany is very late with it.
In Sweden, the contributors to the stock exchanges have had golden times with rising prices.
It's hard to imagine that the next twenty years will be the same.