German Social Insurance Funds Spend 25 Billion Euros on Administrative Costs Annually
According to a recent report by the Federal Association of German Employers’ Associations (BDA), the German social insurance funds allocate a substantial 25 billion euros annually for administrative costs. Of this amount, 11 billion euros are spent on the statutory health insurance, while 5 billion euros each are allocated to the unemployment and pension insurance funds.
The BDA’s president, Rainer Dulger, has called for more efficient structures to reduce costs and alleviate the burden on contributors. He emphasized the need for a social insurance system that operates efficiently, digitally and cost-consciously.
The report highlights the varying administrative cost ratios of the different social insurance funds. The pension insurance fund, with a ratio of 1.2 percent, has the lowest administrative costs, while the unemployment insurance fund, with a ratio of 14 percent, has the highest. This disparity is partly due to the more complex and time-consuming nature of individual counseling for the unemployed, compared to the processing of pension claims.
The BDA is primarily pushing for structural reforms in the pension and accident insurance sectors.