GERMANY - The conservative opposition in Germany has shelved plans for a major pension reform if – as polls indicate – it wins a federal election in September and forms the next government.

In previous months, the CDU/CSU parties had signalled that they would undertake a major pension reform at the start of 2007. In terms of the second pillar, the reform was to include a permanent tax exemption for employee contributions under the so-called Riester pension.

In terms of the first pillar, the reform was to entail a review of the current formula for calculating the state pension benefit to take into account demographic changes.

The CDU/CSU had also considered raising the retirement age to 67 and requiring 45 years of contributions to the state scheme to qualify for a full benefit.

However, none of these measures appear in the CDU/CSU’s election programme, released earlier this week. The passage dealing with pensions is surprisingly brief, saying only that contributors to the state scheme will get a rebate equalling €50 per month for every newborn child. The exemption then expires when the child turns 12.

The CDU/CSU also reaffirms that it will promote second- and third-pillar pensions, adding that the “complicated rules” for government support of the latter will be simplified.

Andreas Storm, the CDU/CSU’s parliamentary spokesman, told IPE that his party had decided to wait and see if measures beyond those in the election programme were necessary.

“Any further action on pensions will depend on the latest government study on demand for second- and third-pillar pensions,” he said, adding that the study would not be unveiled until the end of this year.

Storm, who had earlier outlined plans for a major reform, stressed that his party was “not ignoring pensions, as is evidenced by what our election programme contains – a child bonus and simplifying Riester”.

Storm also said a further review of the formula for calculating the state pension benefit was not immediately necessarily, as the current government already adjusted the formula to include demographic changes.

“The government’s pension reform of last year more or less corresponded to what (former) Labour Minister Norbert Blüm wanted to do in 1997,” he said. Blüm served in the Conservative government of Chancellor Helmut Kohl.