DIW Chief Marcel Fratzscher has praised the pension proposal by Federal Labor Minister Bärbel Bas (SPD) but pointed to high reform costs. Fratzscher said in an interview with the “Rheinische Post” (Monday) that the proposal by Social Minister Bärbel Bas is fundamentally sensible and right. He explained that the existing system creates a huge inequality between civil servants and employees, is very expensive for the state and reduces flexibility in public employment. However, he added that such a reform would be extremely costly in the short term and, according to calculations by the Expert Council, would cost the state an additional 40 billion euros annually. Fratzscher also emphasized that there is an urgent need for reform, particularly in light of increasing old-age poverty and the burden of rising contribution rates. Bas had previously proposed to include civil servants, self-employed individuals and members of parliament in the pension system. However, Fratzscher believes that there are more pressing areas that require reform, such as addressing growing old-age poverty and the increasing burden of contribution rates. The proposal by Social Minister Bärbel Bas aims to bring civil servants, self-employed individuals and members of parliament into the pension system. While Fratzscher acknowledges that the proposal is fundamentally sensible and right, he highlights the high costs associated with such a reform. He states that the existing system creates inequality between civil servants and employees, is expensive for the state and reduces flexibility in public employment. However, he also points out that there are more pressing areas that require reform, such as tackling increasing old-age poverty and the burden of rising contribution rates. Bas’ proposal seeks to address these concerns by integrating different groups into the pension system.
Bas’s Pensions Plan Praised by DIW, But Warns of High Reform Costs
