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Ruth Maria Schüler IW-Trends No. 1 9. March 2022 Pension Concerns in Germany: Determinants and Normative Implications

The level of statutory pensions for future generations is set to decline systematically. If future retirees are to maintain their standard of living, they will therefore need to supplement their statutory benefits with private and occupational pensions – a change already initiated with the pension reforms of the early 2000s.

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Determinants and Normative Implications
Ruth Maria Schüler IW-Trends No. 1 9. March 2022

Pension Concerns in Germany: Determinants and Normative Implications

German Economic Institute (IW) German Economic Institute (IW)

The level of statutory pensions for future generations is set to decline systematically. If future retirees are to maintain their standard of living, they will therefore need to supplement their statutory benefits with private and occupational pensions – a change already initiated with the pension reforms of the early 2000s.

However, the occupational and private pension coverage of certain parts of the population, such as low earners, is well below the national average. The present study examines how individuals perceive the issue of old-age pensions, analysing data from the German Socio-Economic Panel to determine how concern about future pension entitlements is distributed among the population. The results show that women, tenants, divorcees and people with relatively low incomes are more likely to be concerned about their pension coverage than their peers in other groups. In addition, those enrolled in an occupational pension scheme are less likely to experience anxiety on this account. While the new government’s coalition agreement includes the possibility of making financial planning for retirement compulsory, albeit with an opt-out clause, the empirical findings presented here suggest that it would be more advisable to focus on those parts of the population facing a high risk of old-age poverty and concentrating on fostering adequate pension provision there.

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Download PDF
Determinants and Normative Implications
Ruth Maria Schüler IW-Trends No. 1 9. March 2022

Pension Concerns in Germany: Determinants and Normative Implications

German Economic Institute (IW) German Economic Institute (IW)

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Guidelines for the 21st legislative period and beyond
Jochen Pimpertz IW-Policy Paper No. 13 3. December 2024

Agenda 2030 for pension policy: Guidelines for the 21st legislative period and beyond

In Germany, first cohorts of the baby boomer generation are about to enter regular or early retirement. This threatens a decline in labour supply on the one hand and an increase in expenditure for pensions, healthcare and long-term care on the other.

IW

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Andrea Hammermann / Jochen Pimpertz / Oliver Stettes Expertise 11. November 2024

Employment shortly before and after retirement

As a result of demographic trends, around a quarter of all employees in the mechanical engineering sector are expected to retire in the next ten years. This corresponds to more than 296,000 people.

IW

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