Basic Pension Spiral

ARD (public German TV, Channel One) did an update over the Basic Pension episode.  For those who haven't followed it, I'll sum up the 'saga'

Out of 83 million residents in Germany, there are a significant number of retirees (well over one million) that are making a marginal pension (anything less than 1,000 Euro a month).  In fact, some are making in the 500-to-600 Euro a month range, and having to apply for welfare to survive.  Basic reason?  These are people who didn't really have a decent skillcraft, made marginal income for forty-five odd years, and never thought about the mess at the end. 

All of this has been page one news for the past three years....intensifying greatly in the past six months. 

I would suggest that well over half the voting public believe that something must be done. 

So along came the Finance Minister with this idea of a tax on stock investment transactions (only if you bought stock from a company valued at 1-billion Euro or more).  They figured they'd take in around 1.5-billion Euro, and be able to cover this.  The hit?  Well....they needed all of the EU to cooperate because if it's Germany alone....German investors would just slide their money outside of Germany and quietly avoid such situations.  The EU?  A week ago, they said 'no thank you'......they really don't want this kind of tax. 

The fact that everyone was hyped up a month ago and thinking in 2021, this mess would be resolved?  Yeah, it's screwed up.

So the update.....the guy who has the control over the draft bill (the German Labor Minister, an SPD Party member)....has quietly pushed the bill back away from discussions in the Bundestag....giving it a delay of two weeks.

The problem here?  To launch this and carry it the first year.....they need 1.5-billion Euro (roughly 2-billion dollars) to just appear out of nowhere. 

The plus-up (if you can call it that) would go to Germans who made less than 1,250 Euro (as a single guy) or 1,950 Euro (married couple).

But the issue doesn't just end there.....the next problem, the insurance companies which run and maintain the pension fund business....readily admit, they have no digital system in place to gauge or check against this test of the 1,250/1,950 Euro requirement.  They'd have to hire someone to write a program to make this work.

They also admit that the mini-job status in your career is a problem, and they haven't yet figured a way around the tax-exempt part-time jobs that are in the mini-job situation.  Maybe out of your years of work....eight years were mini-job years, and the plus-up being discussed really wouldn't work in that situation.

The partner status?  There are a fair number of German couples who've lived together for forty years....never marrying.   They haven't figured a legal way to handle this type of situation.....where they'd hand the benefit to married couples but not to partner couples.

So I come to the end of this essay.  The Basic Pension idea probably needs three years of analysis to deliver and gearing it to work without error.  To deliver it by January 2021 (what the SPD hyped up)?  It won't happen.

If the SPD Party fails?  I don't think Merkel cares to lift this to a crisis stage and protect them.  It's possible that you could see half-million SPD voters walk out the door and refuse to support them in 2021's national election.....over this 'promise'.

In plain words, it's a mess, with no way to resolve it.