The Pestel Institute has entered the debate surrounding working life and retirement age with a proposal aiming for greater equity within the German pension system. Researchers suggest a differentiated approach to retirement based on income and life expectancy, arguing the current system perpetuates existing inequalities.
The institute proposes that civil servants should work five and a half years longer than other workers, reflecting the statistically longer lifespans enjoyed by this demographic. This suggestion is rooted in data indicating a significant disparity in life expectancy linked to income level.
According to Matthias Günther, Head of the Pestel Institute, individuals with lower incomes statistically have shorter lifespans and a disproportionately high number do not reach retirement age. Conversely, higher earners tend to live longer, benefiting from extended pension payments. Günther highlights that this effectively means a longer and larger pension for those who earn more, while those with lower incomes receive comparatively smaller pensions for a shorter period.
Recent studies, including a 2021 report from the German Institute for Economic Research (DIW), substantiate these claims. The DIW research indicates that male civil servants, on average, can expect to live 21.5 years after reaching 65 years of age, compared to 15.9 years for male workers – a difference of roughly five and a half years. A smaller, but still significant, gap of over two years exists between male employees and civil servants. Furthermore, the study reveals that male high earners have a life expectancy 6.3 years longer than their lower-earning counterparts.
Economists at the Pestel Institute attribute this discrepancy to factors such as greater access to healthcare and a reduced likelihood of engaging in physically demanding labor among wealthier individuals – aspects they contend are often overlooked in pension discussions.
Günther proposes that a “social scaling” of pensions – increasing payments for lower-income earners – could address the issue without requiring civil servants to work longer. Alternatively, a “social dampening” of pension amounts for higher earners could also be considered. The core argument centers on achieving greater fairness within the system by acknowledging the clear correlation between socioeconomic status and life expectancy.