Saturday, January 23, 2021
Slight increase in the east
Heil takes away hope of a pension increase
In addition to the consequences of the corona crisis, demographic change is also affecting pension funds. For the West there could therefore be a zero round this year. But there is also positive news.
Federal Labor Minister Hubertus Heil from the SPD has rejected the hopes of pensioners for an increase in their pension payments in the current election year 2021. “We have to reckon with the fact that there will be no pension increases in the west this year and only a very small one in the east due to the alignment,” said Heil of the “Rheinische Post”. “It is important that it is legally ensured that there will be no reduction in pensions,” emphasized the minister.
The pension development is rule-based and always follows the wage development of the previous year. That is why there have been some significant pension increases in recent years. In the corona crisis year 2020, however, wages hardly increased. Pension policy is facing a major demographic challenge.
“From 2025 to 2040, the baby boomer generation will gradually retire. During this time, two things are important: On the one hand, we need a high level of employment so that premium income remains at a high level. On the other hand, we need the system of Keep pension insurance stable, “said Heil when asked whether a major pension reform is pending in the coming legislative period. “I am in favor of extending the security line for the pension level of 48 percent of the average gross monthly salary beyond 2025,” said the SPD politician.
Overall, the premium income of the pension fund increased despite the exceptional situation in the Corona year 2020. That said a spokesman for the German Pension Insurance Federation. Accordingly, the income from compulsory contributions rose last year by 0.9 percent to around 224 billion euros. “In view of the general economic conditions, which have worsened significantly as a result of the Corona crisis, this is positive news for pension insurance,” said the spokesman.