retirement provision

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In the Federal Republic of Germany , the term old-age provision encompasses the entirety of all measures that someone takes during life so that they can continue to earn a living in old age or after the end of their employment (this can also be before the start of pension payments), if possible without restrictions of living standards . Acquired entitlements to pensions and / or interest from saved assets are used for old-age provision .

history

Old-age provision has traditionally been the responsibility of the family association and has been provided for centuries through “benefits in kind” in the form of provision (see e.g. Ausgedinge ). The active and productive generation had to take care of both the new and the aging generation as part of a large family . In such a social situation, provision in old age was based primarily on having a sufficient number of children, on ownership of a house and / or agricultural land and - for a small minority of the population - on sufficient personal assets. With the emergence of industrialization and the increasing geographical mobility on the one hand and the simultaneous impoverishment of large sections of the population on the other hand, this task could not be solved in an acceptable way within the families.

As early as the 17th century, the first state pension systems were set up for civilian employees of the state and members of the military. In the 18th century, in addition to the pension systems for state employees, company pension systems developed . Finally, at the end of the 19th century, as part of Bismarck 's social legislation, a statutory disability (today reduced earning capacity ) and old-age pension were introduced. The statutory pension was initially set up as a partially funded pension, but the accumulated capital stock was lost in the 20th century due to two world wars, inflation and the economic crisis, so that the statutory old-age pension was converted to the pay-as-you-go system in the 1950s . The development of the last 150 years has led to the result that the responsibility for old-age provision has shifted from the family group and the individual to larger groups (state, collective of the insured community). Above all, the demographic development and the aging and rejuvenation of society and since the 1990s have served as an argument for reformers of pension provision to emphasize the individual responsibility for their own pension provision again.

In Germany, due to the welfare state principle of the Basic Law, the state may not refer dependent employees to the subsidiarity principle alone . The principle of protection against excessive demands, flowing from this same welfare state principle, applies. The state must take regulatory action in this regard. Since there is a fundamental tension here with the rights of freedom and equality, the state measures must be suitable, necessary and appropriate, i. H. comply with the principle of proportionality. In the socio-political discussion, it is essentially only a question of whether groups of people who have not yet been provided for should also be included. It is also about the design of this supply.

General

The current system of old-age insurance in Germany has been based on the so-called "three-pillar model" since the Retirement Assets Act and the RV Sustainability Act :

An alternative classification is the 3-tier model, which does not focus on the pension provider, but on tax aspects:

  • 1st shift: Statutory pension insurance, civil service pension, professional pension, Rürup pension (cohort taxation)
  • 2nd shift: Company pension scheme, Riester pension (subsequent taxation)
  • 3rd layer: Other capital investments, for example private capital and pension insurance (income taxation), property ownership and securities accounts.

To this day it is criticized that the three-pillar model introduced at the beginning of the 2000s is more expensive for the insured and worse in terms of benefits than the statutory pension insurance was previously able to do.

Statutory provisions

The statutory pension is based on the pay-as-you-go system . The contributions paid are not saved, but used for pension payments to the current retirees. There is therefore no entitlement to repayment of the contributions paid, but only to a share in the current income (so-called entitlement ). The young generation pays for the old generation's pension (so-called generation contract ). This is based on the solidarity principle . Due to the age pyramid in Germany and many other European countries, fewer and fewer employees will have to finance the pensions of more and more retirees in the future, which will have to lead to increasing pension insurance contributions or future benefit cuts if current pension benefits are not to be reduced.

As of 2012, the standard retirement age for those born in 1947 will increase by one month; for subsequent cohorts in each subsequent year by a further month until those born in 1958 can take the regular old-age pension (free of deductions) at the age of 66 in 2023. The following age groups must expect an accelerated increase in the age limit by two months per year; This means that the full increase to the age of 67 will take effect for the first time in 2029 for those born in 1964. Each month of early use leads to a pension deduction of 0.3 percent of the pension amount, i.e. 3.6 percent per year.

According to a study by the Institute for Employment Research (IAB), around 3 million additional contributors will be required in 2030 due to the higher age and taking into account the population structure. With a higher level of early retirement, there will currently be a shortage of around 1.2 million contributors.

Politically, additional private or company old-age provision is being promoted, since in the future, according to a widespread opinion, statutory provision will only cover basic needs , but will no longer be able to secure the standard of living .

Civil servants , judges and professional soldiers do not pay their own pension contributions. "The ... lower basic salaries of civil servants compared to the basic salaries of employees are ... viewed as contributions made by civil servants for their provision". Similarly, the Federal Constitutional Court in its judgment of March 2002.

Election officials and the elected members of the Bundestag and state parliaments are treated in a similar way to civil servants .

Company pension scheme

Company pension schemes exist when an employer grants an employee a pension commitment on the basis of the employment relationship. The labor law aspects of occupational retirement provision in the Pension Law (BetrAVG, formerly law to improve company pension schemes regulated). In addition, the company pension scheme is flanked by tax in order to strengthen this type of pension scheme.

The Company Pension Act provides the employee with a right to a company pension through deferred compensation, i.e. waiving future salary. Since this variant brings tax advantages for employers and employees, it is enjoying increasing popularity.

Company pension schemes can be implemented in different ways.

The company pension law determines the five permissible implementation routes:

As a rule, the employee has no choice when it comes to choosing the method of implementation. However, if the implementation takes place via a pension fund, a pension fund or direct insurance and as deferred compensation, the employee has the right to have the contract meet the requirements of state subsidy subsidies .

A problem with company pension schemes can be the rules for early termination of the employment relationship without the occurrence of a pension claim. The possibilities of continuing a pension commitment with a new employer ( portability ) - which means assuming obligations for the new employer - are, however, constantly being improved by legislation. However, except in the case of deferred compensation, the claims are only secured after a certain period of time (legally non-forfeitable). In the event of an early change, the employee's entire entitlement can lapse. The deadline for commitments made after December 31, 2000 is five years. In addition, the applicant must be 30 years of age if they are accepted by December 31, 2008, or 25 years of age since January 1, 2009.

Ultimately, the entitlement to benefits is always directed against the employer, even if an external implementation method has been chosen ( direct liability ). In the event of the employer's insolvency, benefits are guaranteed by the pension insurance association. Pension funds and direct insurance companies (in most cases) grant a legal claim on their own, so that the PSVaG does not regularly have to step in in the event of insolvency.

Lifetime working time accounts

An employee can pay overtime into a lifetime working time account. These are then invested as value and reimbursed to the employee if he takes longer time off, e.g. B. for further training or to bring forward retirement.

A value account also exists as a money value account. The company has usually concluded a contract with an insurance company. The employee can then transfer salary components to the value account. The contributions paid are taken from the gross wage. The employer's social security contributions are also credited to the value account.

The value account can be used, for example, for a sabbatical or for parental leave . The employee receives amounts from the value account without the employment relationship being terminated.

When you retire, the value account can be transferred to a retirement pension at a low tax rate. In the event of termination or death, i. d. Usually the value account is closed and paid out. The social security contributions are deducted. The paid-in capital is taxed according to the fifth rule (as with severance payments ).

The transfer of the value account to a pension is to be interpreted as a salary conversion and is therefore subject to maximum limits. If these are exceeded, it is a case of an accident subject to social insurance. Lifetime working time accounts are therefore not suitable as a substitute for a company pension plan, but rather for financing early retirement.

Private pension

Private old-age provision is based on the basic idea of ​​the funded system . The paid-in capital and the interest earned are therefore due to the saver. He can choose a life annuity or a lump-sum payment.

State-sponsored provision

Rürup and Riester pensions were created in the course of the last major pension reforms and are intended, among other things, to compensate for the falling pension level of the corner pensioner. These types of old-age provision are subject to special regulations. This includes the fact that a state-subsidized old-age provision cannot be mortgaged, sold, bequeathed or pledged. Exceptions are possible, e.g. B. a Riester pension can be bequeathed to a defined group of people.

In addition, if the policyholder should become needy in the course of his working life ("Hartz IV security"), social assistance providers do not count the state-funded pension assets against ALG II . The capital saved should only be used to provide retirement benefits for the saver. If, in the event of death, no spouse entitled to inheritance with their own Riester contract comes into question as an inheritance, the state subsidies must be repaid. The remaining savings capital falls into the inheritance and is inherited like other assets.

Riester pension

The Riester pension is one of the better-known forms of state-sponsored old-age provision (as of 3rd quarter 2014: 16.01 million)

Rürup pension

The Rürup pension is a voluntary insurance that is primarily intended for the self-employed and freelancers . But well-paid employees and civil servants can also make provisions for old age. Put simply, the Rürup pension can be worthwhile for everyone who is not subject to social insurance.

Pension schemes not subsidized by the state

Pension contracts that are not funded by the state do not enjoy a guaranteed continuation of the payments. On the other hand, these types of old-age provision can also be used to build up wealth across generations, as the wealth saved is usually available and inheritable. The tax situation at the time of payment can also play a role. In contrast to the subsidized products, which provide for full pension taxation in old age, non-subsidized products only have to be taxed with the income portion at retirement age.

Fund savings plan

A fund savings plan is a savings contract into which money is regularly deposited and fund shares are acquired for it. Since this form of capital investment does not receive any government funding, the investor is free to decide when and how he wants to dispose of his assets.

An investment in fund savings plans is characterized by a high level of cost transparency. Any costs incurred (e.g. administration fees or sales charges) are documented in the price lists of banks, savings banks and fund companies.

Real estate ownership

Purchasing real estate during the working phase can also help maintain living standards in retirement. When renting the surplus of the income over the advertising expenses must be taxed, which reduces the return.

Real estate funds are another way of building up capital to secure old age.

Retirement provision for family work

see also: Gender Pension Gap

Due to the general conditions of housework and family work as well as gainful employment, Germany has the largest gender difference in pension provision in the OECD comparison. In 2011, the gender pension gap was 44%, almost twice as high as the OECD average (28%). This is particularly due to the old federal states , which had a gap of 42% in 2014, while the new federal states were 23% below the OECD average.

Anyone who is wholly or temporarily inactive in order to devote themselves to raising children or caring for relatives receives, under very limited circumstances, their own financial entitlements for old age.

In Germany, according to § 56 , § 249 and § 249a SGB ​​VI, a limited number of years as child-rearing time is recognized as contribution periods in the statutory pension insurance . Under certain conditions, periods of care for relatives are also contributions to the pension insurance.

In the case of spouses and registered partners who are not or were not continuously employed, it is assumed that the employed partner will provide care . In case of divorce is on the supply balance financial fairness in future pension guarantees. The aim is to enable the partner who, for example, because of bringing up children during the marriage , worked less and was therefore less able to collect pension entitlements, to receive independent care. The pension equalization from the previous marriage is also retained in the event of a later marriage. The family court makes the decision on the pension adjustment . This also applies to a failed registered partnership.

After the death of a spouse, there is an entitlement to a survivor's pension , which, however, expires in the event of a new marriage.

Women are more likely to suffer from poverty in old age than men. The reasons for this are the time spent bringing up children and the lower wage level. In addition, maintenance regulations can play a role in old-age poverty: divorced housewives can or could no longer count on maintenance from their ex-husband in addition to their own old-age pension since the introduction of the new maintenance law in 2008. However, since many housewives , trusting the previously applicable entitlement to lifelong maintenance, have hardly paid into the pension fund themselves, they are threatened with old-age poverty. On December 13, 2012, however, the majority in the Bundestag decided to amend Section 1578b of the German Civil Code on compensatory maintenance depending on the length of the marriage and marriage-related disadvantages.

Pension obligation

The subject of mandatory old-age provision for the self-employed was discussed as early as 2011, unless they are already compulsorily insured through a professional pension. The then Labor Minister Ursula von der Leyen called for compulsory old-age provision for the self-employed. In the coalition agreement between the Union and the SPD, the obligation to provide for old age is not mentioned any further, although both the CDU and the SPD spoke out in favor of a general obligation to provide for old age before the election. This general obligation is not limited to the self-employed. Further information is currently not available. However, there is already a concept for the self-employed. Criticism of the project, as planned by von der Leyen, followed promptly.

This article or the following section is not adequately provided with supporting documents ( e.g. individual evidence ). Information without sufficient evidence could be removed soon. Please help Wikipedia by researching the information and including good evidence.

The main points of the pension obligation are:

  • 250 to 300 euros per month for retirement provision
  • 100 euros to cover reduced earning capacity
  • Compulsory old-age provision should apply to all under 30-year-olds and start-ups
  • Transitional regulation for the self-employed between 30 and 50 years of age

Criticism of the concept of mandatory old-age provision:

  • No empirical evidence that the self-employed are particularly hard hit by old-age poverty
  • When it comes to provision, the self-employed primarily rely on renting / leasing as well as capital from pension and life insurance
  • Old-age pension report 2012 shows that 77% make provisions with the help of the statutory pension insurance
  • Around 53% draw old-age income from private provision
  • On average, former self-employed people achieve an average income of 1,430 euros (compare employees: 1,250 euros)
  • Sectors and associations do not speak out completely against an obligation to provide for old age. However, every self-employed person should decide for himself how and in what form he would like to make provisions.

The BMAS publishes the relevant pension insurance reports. They are in part the basis of political discussions.

In the case of the self-employed, the discussion repeatedly revolves around their inclusion in state pension institutions and the design of the provision. There are restrictive and expansive regulations for these supply systems.

The possible objectives of pension systems in an international comparison range from avoiding poverty in old age to securing the standard of living achieved.

Equality issue

Women often earn less than men and they are less likely to hold well-paid management positions. In addition, some women have - mostly longer - downtimes due to pregnancy and child-rearing. As a result, the pension from the statutory pension insurance for women is on average significantly lower than for men. As housewives, women were often never gainfully employed and therefore do not have their own entitlement to a pension ( old-age poverty , gender pension gap ).

The longer life expectancy of women is reflected in the collective bargaining agreements, as a longer distribution period has to be taken into account, which reduces the monthly pension.

On January 1, 2006, unisex tariffs were introduced for Riester pensions . Since then, men have had to pay the same amount as women, although they receive the benefits for a statistically shorter period.

literature

  • PricewaterhouseCoopers AG, German Federal Pension Insurance: Retirement provision. Advice, design, optimization , Stollfuß Medien GmbH & Co. KG, ISBN 978-3-08-352000-9
  • Confederation of Insured (Ed.): Guide to old-age provision. Make the right provisions and save at the same time. Funding opportunities, investments, insurance . zu Klampen Verlag, Springe 2009, ISBN 978-3-86674-029-7 .
  • Andreas Buttler: Introduction to company pension schemes, 5th edition 2008, Verlag Versicherungswirtschaft, Karlsruhe, ISBN 978-3-89952-364-5
  • Christopher Jung: Company pension scheme (CD / audio book), Verlag Versicherungswirtschaft, Karlsruhe 2007
  • Christian Christen: Political economy of old-age security - criticism of the reform debate about intergenerational equity, demography and funded financing. Marburg 2011, ISBN 978-3-89518-872-5

See also

Web links

Wiktionary: Retirement provision  - explanations of meanings, origin of words, synonyms, translations

Individual evidence

  1. ↑ Christian Christen, p. 36ff.
  2. ↑ Cisch / Karst in Schlewing / Henssler / Schipp / Schnittker, labor law for company pension schemes and time value accounts, loose-leaf, part I, as of September 2014, part 1 A, importance of company pension schemes, margin no. 2, issue 14 Nov. 2012, ISBN 978-3-504-25702-6
  3. ↑ Johannes Steffen, "Three-Pillar-Model" of the old-age security has failed - despite subsidized private provision, no standard of living security. Portal social policy, 2014 ( Memento from April 22, 2015 in the Internet Archive )
  4. ↑ Ingo Schäfer, The Illusion of Securing the Standard of Living - An Analysis of the Efficiency of the> Three Pillar Model <. Bremen Chamber of Employees, 2015
  5. ^ Winfried Schmähl, Political Advice and Old Age Insurance: Pension Level, Old Age Poverty and the Pension Insurance System. Quarterly issues on economic research: Vol. 80, political advice behind the scenes of power, pp. 159-174
  6. ^ Officials or employees series of publications by the Federal Commissioner for Economic Efficiency in Administration Volume 6, Chapter 4.2.3, Cologne 1996, accessed on August 15, 2019
  7. ^ Federal Constitutional Court, judgment of the Second Senate of March 6, 2002 - 2 BvL 17/99 - Item 183, accessed on August 15, 2019
  8. ↑ Section 20 of the Act on the Legal Relationships of Members of the German Bundestag
  9. ↑ See also: Compensation for parliamentarians # Provision for members of parliament in the German federal states
  10. ↑ BMF Gz IV C 8 - S 2222/07/0003; IV C 5 - S 2333/07/0003 Doc 2008/0022798 margin no.195
  11. ↑ Az. IV C 3 - S 2222/09/10041. Tax incentives for private pension schemes and company pension schemes . Federal Ministry of Finance. March 31, 2010. Retrieved January 20, 2019.
  12. ↑ http://de.statista.com/statistik/daten/studie/39412/umfrage/nummer-der-ablossenen-riester-vertraege/
  13. ↑ New OECD data and analysis revealing the wide gap in pension benefits between men and women. OECD, May 2015, accessed March 14, 2017 .
  14. ↑ a b Gender Pension Gap. Federal Ministry for Family, Seniors, Women and Youth, 2011, accessed on March 14, 2017 .
  15. ↑ DIW weekly report 5/2017: Gender Pension Gap
  16. ↑ Poverty in old age in Germany , accessed on May 27, 2013
  17. ↑ Tina Groll : Poor, old, female. Zeit Online, December 24, 2012, accessed June 2, 2015 .
  18. ↑ Supplement to $ 1578b BGB from December 13, 2012 (PDF; 196 kB)
  19. ↑ http://www.bmas.de/DE/Themen/Rente/Rentenversicherungsbericht/inhalt.html - as of December 9, 2014
  20. ↑ Cisch / Karst in Schlewing / Henssler / Schnipp / Schnittker, labor law for company pension schemes and time value accounts, loose-leaf, part I, as of September 2014, part 1 A, importance of company pension schemes, margin no. 2, issue 14, Nov. 2012, ISBN 978-3-504-25702-6
  21. ↑ Cisch / Karst in Schlewing / Henssler / Schnipp / Schnittker, labor law for company pension schemes and time value accounts, loose-leaf, part I, as of September 2014, part 1 A, importance of company pension schemes, margin no. 3, issue 14, Nov. 2012, ISBN 978-3-504-25702-6
  22. ↑ Cisch / Karst in Schlewing / Henssler / Schnipp / Schnittker, labor law for company pension schemes and time value accounts, loose-leaf, part I, as of September 2014, part 1 A, importance of company pension schemes, margin no. 4, issue 14, Nov. 2012, ISBN 978-3-504-25702-6