The German liberal party (FDP) won’t vote for the first pillar reform package (Rentenpaket II), which includes the generational capital equity fund, axing the only change to the pension system at an advanced stage in the legislative process, among those put forward by the government, and that had a possibility to pass in parliament (Bundestag) following the collapse of the governing coalition last week.
FDP deputy chair Johannes Vogel said the pension package agreed by now-defunct traffic-light coalition of Social Democratic Party, (SPD), Greens and FDP would no longer be implemented.
“This pension package cannot and will not come. [Chancellor] Olaf Scholz and [labour minister] Hubertus Heil want to continue to increase contributions for the working middle class and the younger generations. That cannot be done with the [help of the] FDP parliamentary group,” Vogel said in an interview.
The collapse of the traffic-light coalition, which came after Scholz sacked finance minister Christian Lindner, broke a fragile agreement to reform the first pillar pension system, with the SDP supporting a stable level of pension until 2039, and the FDP backing a fund for equity investments to slow down the increase in terms of contributions.
Vogel warned that the pension package was not yet ready for approval when Parliament started the debate on the reform. The FDP pressed for a reform based on the Swedish premium pension model, with contributions flowing to fund pensions, a move rejected by the former coalition partners.
“We need to stabilise pensions through reforms that ensure a higher level of pension instead of higher contributions. We now need a policy that thinks in terms of decades – the opposite has led us to economic problems,” Vogel said.
Scholz and his SPD party have on their agenda the approval by the Parliament of the draft law to stabilise first pillar pensions in the remaining parliamentary sessions until Christmas.
Rolf Mützenich and Friedrich Merz, heads of the parliamentary groups of the SPD and the Christian Democratic Union (CDU), respectively, have agreed on a proposal for snap elections to be held on 23 February, Handelsblatt reported.
Heil said his party “will fight” to find a majority in Parliament to approve the reform package before the elections.
According to Mathias Middelberg, deputy head of the parliamentary group of the Union, the alliance between the Christians Democratic Union (CDU) and the Christian Social Union (CSU), labour minister Heil won’t be able to rely on the CDU and the CSU to approve the pension package.
If it wins the general elections, the CDU, now leading in the polls, plans to introduce an active pension (Aktivrente) to cut taxes on wages of retirees up to a certain amount to lure back people into a labour market lacking skilled workers.
The CDU will also work to provide statutory pensions above a basic pension level for savers who have worked full-time at minimum wage for 45 years and paid contributions, raised children or cared for relatives, according to the party’s programme.
The Christian Democrats also want to introduce mandatory capital-funded retirement provisions for everyone, its programme noted.
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