German Trade Union Federation Criticizes Government’s Pension Package
The German Trade Union Federation (DGB) has criticized the pension package presented by Labor Minister Bärbel Bas (SPD). According to DGB Vice-Chair Anja Piel, the package, which aims to maintain a stable pension rate of 48%, is insufficient in the international comparison. Germany has a low contribution rate, a high retirement age and a low pension level, Piel said in an interview with the Funke-Mediengruppe.
Piel emphasized the need to not only stabilize but increase the pension level, arguing that a fair financing system is necessary. Wealthy individuals, large inheritances and high-income earners should contribute more and federal subsidies should increase, she said. Piel also emphasized the importance of funding benefits like the mother’s pension through taxes, not insurance contributions.
The “sustainability factor” was described as “no longer up to date” by Piel, who believes it artificially keeps the pension low. This factor, which adjusts pension increases to ensure that the burden on contributors is not excessive, is no longer relevant, she argued.
The labor minister, Bärbel Bas, had presented a draft pension package on Wednesday evening, which aims to maintain the pension rate at 48% and expand the so-called mother’s pension. The SPD faction has announced further steps to secure the standard of living in old age, with the next step being a reform of the occupational pension system, which is expected to be implemented this year. The reform aims to make the company pension more binding and provide targeted support for small incomes, according to Dagmar Schmidt, the deputy faction leader of the SPD in the German Bundestag.