Currently, the pension fund receives 18.6% of each gross salary. Employees and companies pay half, or each – 9.3%. The pensions paid today are financed by this money. At the same time, anyone who pays pension contributions acquires the right to receive an old-age pension.
Upper limit until 2025 only
At present, there is a legal cap of up to 20% on the compulsory pension insurance contribution rate – but this rule only remains in force until 2025. However, Heil promises that the current cap will not rise not soar more. “Only in the second half of the 2020s will the rate increase slightly,” the SPD politician said in an interview with RND. “My goal is not to allow too big an increase after 2025.”
According to Heil, there are now more social security contributions for 5 million workers than expected ten years ago. As a result, he said, the premium rate stayed at the same level for longer than expected. “I want to stabilize the amount of compulsory retirement in the long term, so that people can count on good old-age security in the future,” the minister said.
More women and immigrants
With the birth rate in Germany falling since 1963, there is a risk that fewer and fewer workers will have to finance old-age pensions for an ever-increasing number of retirees.
Due to demographic issues, some experts continue to advance the idea of increasing the length of the working day even further. Other measures aimed at stabilizing pensions are increasing female employment and immigration. In order to facilitate migration to the labor market, the traffic light coalition wants to introduce a new law.
