Pension Topic

If you notice over the past week or two in Germany.....there's been some debate over pensions, and it's gotten a fair number of Germans talking.  The German media has covered the topic....at least from the political perspective, and lightly on the cost-factor of the two suggested areas of change on the board.

The first area?  There's a discussion to allow retirement at age sixty-three.  You can imagine the happiness factor here.  A bunch of Germans would like this idea.

The negative?  Well....it would cost the country more, and has to be funded in some fashion.  It also invites this discussion of a bunch of Germans coming up and leaving the work-force.  Where will the new employees come from?  The birth rate isn't that great, and you'd have to find replacement workers.

The second area?  Around two decades ago....the SPD pushed through a change to allow a certain year-group of women.....three years of retirement credit for having kids.  The women in the second group?  One year of credit.  Over the past decade....this has ruffled a number of women in various ways.  Unfairness....comes up continually in this pension discussion.

So the SPD minister for labor has voiced the idea that this needs to be fixed.  She won't say exactly how....but the unfairness complaint has reached a peak....so to speak.

The total cost?  The numbers differ....depending on who you watch on German nightly news or what newspaper you pick up.  Generally, add-on for each year is roughly four billion.  But generally....more and more folks retire each year....so around 2030....you peak out with an extra ten to eleven billion Euro in costs.  For the next ten years.....you ought to figure sixty to seventy billion that have come out of thin air to support the deal ($80 billion dollars roughly).

When you put the number up and start to think over how this money would be invented.....it just isn't that simple.  Germans are already taxed to a fair degree....and to add another percent on the sales tax or another two percent on the pension tax.....just won't be appealing.  Yet, most women want the unfairness issue tossed, and most everyone wants early retirement.

The curious thing?  It does not appear that the labor minister has met up with the finance minister....to discuss where the money will come from.  Normally, you'd expect this....but they are of different political parties, and maybe that figures into this mess.

If you ask me....the SPD has opened up a can of worms....which can only lead to a dismal 'no' somewhere down the line.