Seniors can look forward to higher pensions. The reason is a billion surplus in the pension fund. Minister of Labor Heil is satisfied and praises the German labor market.
The German pension fund recorded a surplus in the billions last year. That said the President of the German Pension Insurance Association, Gundula Roßbach in the “Bild am Sonntag”. “Income is increasing, last year there was even a surplus of 3.4 billion euros – we didn’t expect that.” This means that the pension fund reserves at the end of 2022 were higher than ever before. “The cash position looks very good,” says Roßbach.
More money for pensioners
The 21 million pensioners in the country can therefore look forward to higher pensions this year. According to Roßbach, the annual pension adjustment will “probably be decent” this summer as well. According to forecasts from the autumn, there could be around 3.5 percent more in the west and a good 4.2 percent in the east. The official pension adjustment will take effect on July 1st and will be decided shortly.
The pension increases are based on wage developments in the country, and according to Roßbach, they are pointing upwards. “The previous collective agreements also give an idea that senior citizens can hope for a pension supplement in the years to come.” “The numbers prove: The pension is stable and will remain stable,” said Roßbach.
Pension contributions stable until 2026
The reason for the full coffers is that “despite the mood of crisis, things are going well on the job market, and companies are even urgently looking for workers”. Added to this would be the increasing number of immigrants and higher life expectancy.
Federal Minister of Labor Hubertus Heil was also satisfied with the surplus. A strong job market leads to stable pensions, the SPD politician told the Reuters news agency. “This is also reflected in the good development of the sustainability reserve of the statutory pension insurance, which has increased to 42.7 billion euros according to the preliminary results.”
According to Roßbach, pension contributions will remain stable at 18.6 percent of gross wages until 2026. “After that, the contributions could rise – that also depends on what the pension package will look like, which politicians want to launch this year.”
Heil had assured that the contribution rate would not skyrocket even after the expiry of the upper limit in force until 2025 and spoke of a slight increase.
Pension package should come quickly
Heil plans to permanently secure the pension level at at least 48 percent of the average wage. Although the coalition wanted to launch the project last year, there is still no draft law. The reason is open questions.
For example, Finance Minister Christian Lindner (FDP) wants to include the details of the share pension he is planning in the pension package. From the mid-2030s, this is intended to relieve the pension insurance system through proceeds on the capital markets.