Wednesday, October 7, 2015

The Lesser Pension Deal

I sat this morning in some crowd while doing my bus trip.  Two older German guys were chatting and the topic from what I could figure.....was immigrants, refugees, work, and the pension situation.  I probably got fifty percent of the conversation, but there's this one key element which the one guy noted and I did get in plain understanding.

As you gaze across at this large crowd of immigrants and refugees for Germany in 2015 (maybe 850,000 to 1.5 million).....there's a fair number which are in their twenties, which is positive.  But there are probably five-percent of these guys who are forty years old or older.

So, you look at how these older guys (forty or older) will fit into the pension program of Germany.  They will spend at least eighteen months involved in German language and integration training, then search for a house and job.  At best, you can figure Hammad (my scenario guy) is presently forty-one and will be forty-three by the time he's employed.

By the time that Hammad reaches sixty-five.....he will have only accomplished 22 years of pension contributions....compared to a regular German guy who started at age 16 and has contributed almost 49 years of pay into the deal.

The regular German guy with 49 years of pension contribution?  He'll likely get around 1,100 Euro a month (if he was in the lower wage category).   The new guy, Hammad, with 22 years of contributions?  He'll get at best 650 to 700 Euro a month.

Can Hammad live off 700 Euro a month with his wife?  Marginally.....but I'd have doubts.  Hammad will probably have to apply for welfare, or live with a son or daughter.....if they have space for him.

This little chat that I listened something that no journalist or reporter has really discussed in Germany.  While the bulk of these young guys coming in will help the pension program and fit better.....these guys....especially over forty years old....are going to wake up in a decade and realize the shortfall involved and how crappy that German pensions can be.

Can the German government make up for this?  No, the system isn't built for that type of repair or fix.

A problem down the line?  I'm guessing that it'll become obvious in five years and some political figures try to suggest some repair involving tax funding.....which most Germans will be frustrated about and angry.  Just another one of those odd problems with the whole asylum thing.

No comments: