A rising life expectancy, the obsolescence of society and low birth rates - the current demographic change is a tremendous challenge for the German pension system. In its history, the German pension system has undergone several fundamental changes. Founded in 1899 as the first pension system worldwide, it continuously adapted to changing circumstances.
In 2018, the commission “Verlässlicher Generationenvertrag” is founded by the Great Coalition. Secretary of Labor, Hubertus Heil, chairs this commission. In cooperation with the Federation of Trade Unions, employers’ associations and the Max Planck Institute, the commission works out a plan to ensure the continuation of the current pension system and thus the continuance of the inter-generation compact.
This research paper focusses on how the decisions of the great coalition regarding the pension system suit the demographic change and its impact on the inter-generation compact. After a short resume of the development of the German pension system and a differentiation between capital-covered and shared-financed pension schemes, the pension plans of the great coalition are analysed and evaluated from the aspect of the demographic change and their financing, before the answer to the starting question is given in the conclusion.
At this point, it has to be mentioned, that this research paper is to be understood as a general overview of the subject of demographic change, political decisions and the inter-generation compact. It explicitly focusses on the regular retirement pension and only briefly touches other pension forms like the mothers’ pension or the limited incapacity benefit whilst still using the costs of these for calculations. Therefore, the consulting of specialized literature is advised. Besides this, a basic knowledge of the German pension system is required.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- The German Pension system and the inter-generation compact in a nutshell
- The development of the German Pension system
- The inter-generation compact
- Comparison between capital-covered and shared-financed systems
- Pension plans of the Grand Coalition
- The demographic change: development of the population in Germany and its consequences for the pension system
- Financing of the pension plans
- Conclusion and discussion
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This research paper examines the pension plans of the German Grand Coalition in 2018 in relation to the demographic change and its impact on the inter-generation compact. The paper aims to assess whether these plans provide a future-compliant reorientation or represent a termination of the inter-generation compact.
- The development of the German pension system
- The impact of the demographic change on the pension system
- The role of the inter-generation compact
- The financing of pension plans
- The future sustainability of the German pension system
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: Provides an overview of the challenges posed by the demographic change for the German pension system. It introduces the commission "Verlässlicher Generationenvertrag" and its objective to ensure the continuation of the inter-generation compact.
- The German Pension system and the inter-generation compact in a nutshell: This chapter offers a concise history of the German pension system, highlighting its transition from a capital-covered to a shared-financed system.
- The development of the German Pension system: This sub-chapter elaborates on the evolution of the pension system from its foundation in 1889, tracing its adaptation to changing circumstances including hyperinflation and the introduction of a pay-as-you-go system.
Schlüsselwörter (Keywords)
The research paper explores the core concepts of the German pension system, demographic change, inter-generation compact, capital-covered and shared-financed systems, and the financing of pension plans. It examines the challenges posed by a changing population structure and rising life expectancies on the pension system and the future sustainability of the inter-generation compact.
- Quote paper
- Marcus Schwesinger (Author), 2018, The pension plans of the grand coalition in 2018 referring to the demographic change, Munich, GRIN Verlag, https://www.grin.com/document/437395
