Pension gap
With pension gap (also supply gap ) is usually referred to one percentage by which the last monthly net income before retirement the statutory pension exceeds. More recent studies have expanded this principle and, in addition to the statutory pension scheme, also take into account company and private provision measures when calculating this fictitious pension gap. Since the level of income to cover one's own provision is not an absolute and constant variable, the term suggests a financial deficiency that is not perceived as such by all people with the lower income from the start of retirement.
In the political discussion , the target value of the standard pension level to be aimed for by the statutory pension insurance is named. In the annual pension information in Germany, a possible pension gap is explicitly pointed out. The term is used in the financial planning of the insurance industry to identify possible long-term savings needs in order to close the pension gap . Financial service providers use the term pension gap to inform potential customers about the possibility of additional private provision.
Basics
Retirement income
Retirement income is usually made up of different parts. Depending on national legislation and tradition, their weighting is very different internationally. With regard to old-age provision, there are usually three pillars :
- Statutory pension insurance
- Company pension scheme
- Private old-age provision (including various assets)
Required income in old age
The income required in the retirement phase (required income) varies greatly from person to person. In general, it is assumed that the need income in old age is lower than the last income of employment. So do not apply after retirement
- Employment-related costs (travel expenses, clothing, contributions to professional associations)
- Pension contributions
- There may be higher tax exemptions for income taxation
In addition, in many households the financing of owner-occupied residential property and financial support for the children will be completed by this point at the latest. On the other hand, the increased proportion of leisure time may increase the costs for hobbies, for travel or for fulfilling long-cherished wishes. Costs for services previously borne by the employer (e.g. company car, company cell phone, Bahncard) must also be taken into account. As life expectancy increases, so does the risk of falling ill in old age and of being in need of care, which can lead to additional financial burdens.
Economic point of view
From the microeconomic point of view , the individual tries to achieve an intertemporal optimization of consumption . That means: Saving for old age reduces the possibilities of consumption during the employment phase and increases income and consumption possibilities during the retirement phase. This makes sense as long as the marginal utility of consumption in the retirement phase is higher than that in the employment phase. When assessing this marginal utility, the probability of retirement plays a role in particular . For this reason, a Homo oeconomicus would accept a pension gap.
In practice, however, due to their complexity, the intertemporal optimization of consumption is hardly possible. Rather, it plays a role:
- The ignorance of the payments that are actually to be expected and required
- Lack of general financial education (here with regard to pension instruments)
- Low emotional willingness to deal with the topic of “age and finances”.
Different definitions of "pension gap"
Depending on the direction of the discussion, the term “pension gap” is defined differently.
| The pension gap is the difference | Pension gap | use | |
|---|---|---|---|
| Retirement income | Reference value | ||
| Statutory pension scheme | last net income | Very large | political discussion about the (too low) pension level |
| Statutory + company pension scheme | last net income | big | Argument for increased retirement savings |
| Statutory + company + private pension | last net income | big | Argument for increased retirement savings |
| Statutory + company pension scheme | individual need income | neutral | Forecast of poverty in old age , determination of the individually necessary retirement savings |
| Statutory + company + private pension | individual need income | low / pension surplus | political discussion about the (too high) pension level |
In this article, the term pension gap is used as follows (unless otherwise stated): statutory plus company pension minus individual needs income
If this balance is negative (i.e. if the required income is greater than the sum of the two pension schemes), then there is a pension gap.
The pension gap can be calculated on the basis of both net and gross amounts. While the current status quo of pensions can be reproduced with the help of net figures, the use of gross figures particularly accommodates the fact that there are frequent changes in tax legislation.
Use in politics
The term pension gap is used in the political debate to describe the growing discrepancy between net income before retirement and the state benefits paid at retirement age. While a so-called standard pensioner still received pension payments from the statutory pension insurance in the amount of almost 70 percent of the net salary, this net pension level should fall to almost 59 percent by 2030, according to the German Institute for Retirement Provision (DIA). Based on the last gross income, the statutory pension level will even decrease from 48.5 percent in 2005 to almost 40 percent in 2030.
Reasons for the growing pension gap in the Federal Republic
The statutory pension insurance is an achievement from the Wilhelmine era - it was enacted in the social insurance laws at the time of Reich Chancellor Bismarck in 1889. In the still young Federal Republic of Germany, Chancellor Adenauer adapted the pension to the increased standard of living and in 1957 introduced a pay-as-you-go pension insurance, according to which the payments of pensioners are financed from the income of the employees - the so-called generation contract . In the real economy, the system of pay-as-you-go pension insurance only functions cost-neutrally as long as the population grows or remains constant. If the proportion of the younger population decreases, the number of contributors decreases in relation to the number of pensioners. An adjustment of the pension insurance contributions of the contributors will be necessary. However, this is only one factor in pension trends. The development of productivity is also decisive for the pay-as-you-go system. In the opinion of proponents of the pay-as-you-go system in the statutory pension insurance, the decline in the labor force and the higher life expectancy of pensioners can certainly be compensated for by increased productivity .
The demographic turnaround (“ Pillenknick ”) turned the pension into a grant project: In 2005, the state's compulsory benefits for the pension insurance accounted for around one third of the entire federal budget at 77.43 billion euros. Since the relationship between contributors and beneficiaries has deteriorated and will continue to deteriorate in Germany, politicians also had to adjust the pension level to the changed realities. However, the income level has increased overall. It was decided to reduce the earnings of future pensioners and to gradually raise the age of entry into the deductible old-age pension to 67 years (see regular old-age pension ).
As a result - due to the reforms of the red-green and black-red federal governments - it is foreseeable that the statutory pension in Germany will only allow a kind of basic provision for pensioners in the coming decades, while maintaining the usual standard of living . "In the future, the standard of living will only be maintained if the financial leeway of the Retirement Income Act and the state funding for private provision are used to build up private provision," was the warning in the 2005 pension insurance report . According to many scientists and the insurance industry, company and, above all, private old-age provision will therefore play an increasingly important role for many in the coming decades.
Pension difference between the sexes
The term pension gap is also used in part for the gender pension gap , the relative pension difference between the sexes, which has been recorded by the Federal Ministry for Family, Seniors, Women and Youth since 2011 depending on the region, marital status, professional qualifications, year of birth and the presence of children .
Determination of the pension gap in the financial analysis
An essential part of private financial analysis is the determination of the individual pension gap. The basis is an analysis of the required income and the size of the capital stock required for this.
- The need income is derived from the consumption wishes and goals of the person concerned.
- The capital stock can only be roughly estimated in advance: the longer the savings phase , the more it depends on the level of interest and compound interest.
Self-assessment of the pension gap
As part of a dissertation on the topic of old-age provision: Theory and empirical evidence for the promotion of voluntary retirement savings, around 11% of around 1200 respondents estimated a negative difference between retirement income and retirement needs for themselves. Around 89% estimated an individual surplus.
Pension gap as a sales argument
Almost all providers of pension products advertise their products with the argument that the pension gap needs to be closed. In addition to the pension gap calculators on their websites, they use studies on the subject of old-age provision for advertising and argumentative purposes.
swell
- ↑ Johannes Leinert: Retirement provision: Theory and empirical evidence for the promotion of voluntary retirement savings, Diss. 2005, p. 80 ff. Online version (PDF; 859 kB)
- ^ Peter Lunt et al .: Psychological, Social and Economic Determinants of Saving: Comparing Recurrent and Total Savings. In: Journal of Economic Psychology 12 (1991), pp. 621-641.
- ↑ Archived copy ( Memento of the original from July 16, 2007 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. in: ZDF Online, October 31, 2005
- ↑ Working Group Alternative Economic Policy MEMORANDUM 2004 - "Employment, Solidarity and Justice - Reform instead of Counter-Reform", p. 6 (PDF; 244 kB)
- ↑ Pension insurance report - pensions can soon no longer secure standard of living in: FAZ online, March 8, 2006
- ↑ Equal Pension Day: Large pension gap between men and women. WDR, August 6, 2015, accessed March 19, 2016 .
- ↑ Johannes Leinert: Retirement provision: Theory and empirical evidence for the promotion of voluntary retirement savings , Diss. 2005, p. 175, Tab. 3: Estimated difference between retirement income and retirement needs, online version (PDF; 859 kB)
