The corona pandemic and the energy price crisis have caused serious setbacks for the economy in Germany - but so far they seem to have left the statutory pension fund almost untouched.
For this year, the German pension insurance is now expecting a net profit of 2.1 billion euros, as reported by Anja Piel, Chair of the Federal Board of Management, on Wednesday.
In the spring, the pension insurance still calculated with a deficit of 6.6 billion euros for this year.
At the same time, the financial reserve of the pension fund, the so-called sustainability reserve, is now heading for a new record level of 41.7 billion euros, as Piel presented at a press seminar in Würzburg.
Dietrich Creutzburg
Business correspondent in Berlin.
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The outlook for the coming years has also brightened up unexpectedly: an increase in the contribution rate for employees and employers – currently 18.6 percent of gross wages – is not expected until 2027, according to the latest forecast.
This is all the more remarkable as even older projections from the time before the corona pandemic came to the conclusion that the pension fund would run out by 2023 or 2024 at the latest and would therefore require a higher contribution rate.
Against this background, the old, black-red government coalition had decided to cap the contribution rate by law at 20 percent for the period up to 2025.
According to the new projection, which can also be found in the yet unpublished draft of the Federal Ministry of Labor’s annual pension insurance report, the contribution rate would rise to 19.3 percent in 2027 and then reach 20 percent in 2029 – provided that pension finances were not burdened by new legislative changes by then.
The job market is doing better than expected
The main reason for the positive data is that the labor market and the number of jobs subject to contributions have developed better than expected.
To the extent that inflation pushes up wages more, this also flushes more money into the pension fund through the contribution payments;
Both together should bring her 12.6 billion euros more in compulsory contributions from employment this year alone than in 2021, an increase of 5.4 percent
Admittedly, little has changed in the foreseeable further acceleration of the increase in pension expenditure.
This year, the social security fund expects an increase of 4.2 percent to 308 billion euros.
And with the impending retirement of the baby boomer generation, more and more contributors are retiring from working life for reasons of age – and will then draw their own pension.
One reason for the favorable projection results is that the government now expects more immigration not only in the short term but also in the long term: the net immigration of 200,000 workers per year previously assumed in long-term forecasts has been increased to 250,000 per year with the new calculation.
Since, in principle, any growth in the group of contributors is advantageous for pension finances, this also contributes to the positive new estimates.
Notes on pension increases
The draft of the pension insurance report also gives initial indications of how the next pension increases could turn out.
According to the current data, an increase of 3.5 percent in the west and 4.2 percent in the east is expected for July 1, 2023.
These numbers had recently leaked from the Ministry.
Since the data for the final calculation will not be available until March, as usual, these are only rough guide values.
For the forecast period up to 2036, the draft assumes an increase in statutory pensions by a total of 43 percent or an average of 2.6 percent per year.
If wages rise faster with inflation than the long-term assumptions have so far shown, the increase in pensions would also accelerate.
In addition to external factors, political decisions will also influence their financial development.
This includes, above all, the traffic light's plan to set a "permanent" lower limit of 48 percent for the indicator of the pension level.
In practice, this would eliminate the demographic factor introduced at the turn of the millennium from the calculation of the annual pension adjustments, and the percentage pension increases would be accelerated.
This contrasts with the plan to generate additional income for the pension fund with a new, state-organized share reserve in order to relieve it with additional grants from the mid-2030s onwards.
However, the dimensions of both projects do not fit together properly so far: 10 billion euros are initially planned for the capital stock - the income from which the pension fund should then receive.