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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

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

Pension Concerns in Germany: Determinants and Normative Implications

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

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A Systematic Study of Neutrality in Pension Financing and in the Burdens and Incentives for Members of the Statutory Pension Scheme
Jochen Pimpertz IW-Trends No. 4 2. January 2023

„Actuarially Fair” Reductions in Early Retirees’ Pension Benefits

Calls for the reduction in state pension benefits for early retirees to reflect real insurance risks imply that early retirement need not involve any additional costs.

IW

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Michael Hüther / Jochen Pimpertz IW-Policy Paper No. 6 6. October 2022

Asset accumulation for retirement provision

The pay-as-you-go statutory pension insurance is intended to protect workers in Germany from having to rely on tax-financed assistance in old age. However, due to the ageing of society the security level of the statutory pension insurance must decrease.

IW

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