Friday, November 25, 2016

Pension plans: Who benefits from the pension Deal – and who loses – THE WORLD

Die Grand coalition has agreed on Thursday evening on a pension compromise – and then again not. Apparently, the coalition fell apart, to clarify the financing of more expensive parts of the package.

Already have reached an agreement that the negotiator is only a small part of the measures, the Minister of labour Andrea Nahles (SPD) wanted to enforce. Clearer than the financing of the projects, but now, who will profit from the decisions – and who is more asked to pay.

the most Important agreement is the approximation of the annuity values in West and East Germany, in a total of seven stages up to the year 2025. Currently, East-pensioners received only 94.1 percent of the pension of a Western retirees would have with a comparable employment history and income; by 2025 it is expected to be 100 percent.

“the measure is an approximation of the pension law in the East and the West, and not an approximation of the pensions, although this is often understood like this,” says Jochen Pimpertz, a pension expert from the employer middle Institut der deutschen Wirtschaft Köln (IW Köln).

Ost-pensions will be in the future

The differences are due to historical reasons: Because the income from work were in the GDR at the time of reunification is very low, it was decided, the legislature at that time to rate the Ost wages and contributions in the calculation of pensions is higher than in the pension system for the West – and to do so quasi-so, as the wages would have been higher. The Pension was lower.

Whether the billion is financed heavy the approximation from contributions or taxes, is not yet clear, the clear winner of the measures, however, already: The pensions of today’s East-pensioners rise by 2025 to ordinary six per cent.

On the losing side are to be found meanwhile, workers in East Germany: The East-wages should in future be treated in the same way as the West-wages, and not, as in the case of reunification, decided to upgrade. Future East-pensioners are treated the same as their Western colleagues and will get the same wage in the future a lower pension. Since the East-salaries are still lower than in the West, that the East-could be pensions will be significantly smaller than in the West.

“The alignment of the East-West-pensions will come”

Union faction leader Volker Kauder said that the alignment of the East-West pensions would start in January 2018 and 2025. Until then, however, some key Details need to be clarified.

source: The world

In the transition period until 2025, will incur costs for the change in the system. The should be tax-funded, would be affected all taxpayers; it should be on the pension insurance contributions paid, would bear all of the contributors to the load.

disability pension will be increased

negotiators have Agreed on more money for people who can no longer work due to health reasons or because of an accident in your job and a state pension because of acquisition reduction. So far, it will be assumed in the calculation of these pensions are fictitious, that you have worked up to 62 – regardless of what age you are incapacitated.

The result of corresponding reductions, which also provide for early retirees for smaller annuities than if you had worked until 65. In the future, the pensions are to be calculated so as to work as if the Affected until the age of 65 ceased to be. These upgrades to take place in several stages, until 2024.

in fact, around 1.8 million people in this country disability pension are at risk of, poverty. Due to the high number of beneficiaries of the measure, however, is also expensive. The cost for this change to bear all the contributors and the employers. For the contributors to the risk of poverty is reduced in this way, however, in the case of a disability, which can affect anyone.

disability remains for Younger at risk of poverty

Nevertheless, especially young workers, should make provisions for the case of incapacity, warns IW-pension expert Pimpertz: “The Changes the disability pension improve, but nevertheless, the pensions don’t tend to be as high as the pension that would have received the Affected, if they had actually worked until 65.”

especially in the case of young people who had worked in higher salary steps, is the not the case. “Newcomers should be secure and therefore private, because you could make a fortune if they had to early retire due to disability,” says Pimpertz.

The coalition partners have also decided the company’s pension scheme and the Riester pension strengths. This increase in state aid to flow in these forms of private old-age provision. In particular, low-income earners more money to get from the state for the Pension with occupational pensions. They are also the big profiteers of these changes, which are financed by all taxpayers.

company pensions will be subject to greater market risk

Financially better-off workers in the future to conclude a company pension, but could suffer from a new. In the future, the employer will not guarantee the conclusion of the pension contract, namely, a fixed amount of pension or profit, but to predict only the amount of its own co-payment contributions.

The companies are relieved in this way of market and interest rate risks. You will then be borne by the employees. For this measure means less security when planning your retirement, because you are more exposed to the UPS and downs of the financial markets.


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