GERMANY - Ministers operating in the north German province of Schleswig-Holstein may in future have to take care of their own pensions, if the Green Party is successful in its attempts to get key pension changes made.

 Members of Parliament (MPs) to the regional parliament of the province bordering Denmark have received pension money as part of their remuneration since 2006, instead of receiving a guaranteed civil servant's pension at the end of their career.

This money is supposed to be saved towards retirement in a pension fund or similar vehicle and MPs have to prove they are not using it for something else.

However, the Green Party has now put presented a motion for local government ministers and state secretaries which would make the costs of pension provision for ministers and state secretaries more transparent, as the money would have to come out of each year's budget instead of being listed as liabilities shifted to future generations.

"Furthermore, a switch between [working in] politics and the private sector will be made easier once systems are compatible," stated Monika Heinold, head of the Green Party in Schleswig-Holstein.

MPs are already responsible for their own retirement provision in Baden-Württemberg and Nordrhein-Westfalen but the suggestion to include ministers is "as far as we know a novel one," said Klaus Stürmer, managing director at AKA, the association of local and church pension schemes, who added this step would be seen as a "political signal".

Ministers and state secretaries are currently granted pensions with a replacement rate of up to 70%, in addition to any pensions from previous jobs they have held.

Yet the Green Party believes this is "over-provision" for a privileged group.

Before the financial crisis hit, Schleswig-Holstein had put the creation of a funded retirement vehicle for civil servants into its preliminary budget plans for 2010.

It should have started with a €3.5m payment but the regional government has so far failed to deliver a definite decision on this subject. (See earlier IPE story: Crisis halts pension fund creation)

 

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