The German government is working on a draft law to reform the first pillar scheme with the statutory equity pension model, or Aktienrente, to be finalised in the next few weeks, said Johannes Vogel, deputy chair of the Free Democratic Party (FDP) and member of the parliamentary committee on labour and social affairs, in an interview with T-Online.de.
The government, supported by the so-called traffic-light coalition formed by the Social Democratic Party (SPD), FDP and Greens, plans to put in place the statutory equity pension this year, Vogel added in the interview.
The cabinet is currently working to design a model like the Aktienrente, as it has been stipulated in the coalition agreement, that “will be implemented in detail [..] I’m currently waiting for the government’s proposal for this”, he said.
Questions emerged recently on the government’s plan for the Aktienrente after finance minister Christian Lindner, of the FDP, presented a draft budget for 2022 but without mentioning the €10bn financing to kickstart a public fund investing in equities globally, a pillar of the reform towards the statutory equity pension model.
The federal budget for 2022 foresees in total €116.2bn for pension insurance, including around €8.4bn to guarantee basic financial security in old-age and to support low-earners.
There is still time to pass the budget until June and “a lot will happen before”, Vogel said, adding that the statutory equity pension is an “integral part” of the work of the current coalition government. The Aktienrente will be included in the federal budget “as soon as we have agreed on the details,” he said.
Experts have criticised the planned start-up financing of €10bn for the capital-funded pension component intended this year for the Deutsche Rentenversicherung, the institution managing the first pillar scheme, and included in the electoral programme of the traffic-light coalition, as being too low.
The question of financing the first pillar pension system reform has also laid bare different views within the government coalition.
Markus Ruth, responsible for pension policy for the Green Party, said that in reality “little has remained” of the original idea of the Aktienrente that was in the electoral programme of the FDP, and that the source of the €10bn for the Deutsche Rentenversicherung it is still unknown.
“One thing is clear: a one-off payment of €10bn would only be a drop in the bucket when it comes to pensions,” Vogel said in the interview, adding that the €10bn is only a first step and the plan is to set up a “permanent fund” investing globally.
In its electoral programme the FDP had pitched the idea of the statutory equity pension, or gesetzliche Aktienrente, with employees paying 16.6% of gross wages into a pay-as-you go system and 2% into a public scheme for funded pensions, similar to the Swedish equity fund AP7, as a matter of fact splitting the first pillar in Germany into two pillars.
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