Starting in 2021.....the 'Basic Pension' will start up. This came up as a final Bundestag discussion yesterday, and the two key parties....the CDU and SPD....agreed on the finer points of this.
For those who didn't know....there is a pension crisis underway in Germany, where around a twenty-percent of pension-retirees are basically drawing only enough to be considered in welfare status. The chief reason behind this? Well....this is the crowd who didn't have a big craftsmanship certificate in their life....took marginal jobs for forty-odd years, and woke up around age 65 to discover that they were to only make 500 to 800 Euro a month, which isn't enough to survive in Germany.
The draft of the new plan now? Starting around age 33....the pension contributions are going up (via a surcharge). You (the worker) and your boss, are going to pay the surcharge. This surcharge will be staggered in some fashion (yet to be explained).
There's a good reference point for the story over at ARD (public TV news, Channel One).
Who benefits here? Roughly 1.4 million German retired folks....of which they figure the vast majority (near 70-percent) will be women.
The extra money required and paid by the government? In the first year.....near 1.4 billion Euro.
If you are retired and single....making 1,250 Euro a month.....you are basically unaffected by the deal. Married and retired.....over 1,950 Euro....you are unaffected.
Some complaints about the unfairness of this? There probably will be some to talk about the folks lifted up, and the single retiree sitting there and making 1,251 Euro is unaffected with the deal worked out....while his friend down the street with 1,150 is helped to rise to 1,250 Euro status.
Resolving the mess? To some degree, I might go along with that. But it also requires people to put more money into the retirement system, and requires tax revenue to correct. The fact that these people existed for decades with no real craftsmanship background? That problem continues on.
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