Group of European Pensioners from Savings Banks and Financial Institutions


Index of documents > Euromeetings Magazine > Euromeetings Number 5

A tough battle is being fought in Germany centred on the future structure of retirement pensions; this battle will be decided next autumn/winter. The problem arises from a real indisputable fact, out of every ideology: the demographic factor. The ‘agreement between generations’, that had been working so far without dramatic breakdowns –a few punctures, fixed immediately with public funds–, consisted on the fact that, with their monthly insurance instalments, the working population maintained the pensioners that, for their part, had paid those too. Now the circumstances have changed. The number of births decreases, the average age of the population increases; the day in which one worker will have to shoulder not 1, but 1.5 pensioners is getting closer. It is obvious that under this numerical ratio, the agreement between generations has stopped being bearable; the total monthly instalment, that is to say, the share of the insured plus the one of the employer, would be close to a fourth of the gross salary.


How to sort out the problem? The solutions vary according to the ideologies. The neoliberal ideology, which is in vogue these days –‘let everyone take care of themselves’ or in all its crude reality: ‘every man for himself’– finds an easy solution at first sight: to reduce the pensions. From a more or less long 70% of the last salary, to 64% for those who are 30 years old today; or 65.5% for those who are 40. Result: the great mass of pensioners –the working classes, with modest salaries and also modest pensions– will be reduced to the level of social aid, for a working life spent for the benefit not only of one’s own family, but also of the community; a life, besides, even harder, precisely in those cases most hardly affected by the reduction.


Against that ‘easy’ solution not only rise up the potential interested people, but also the town councils, on which the payment of the social aid weigh, and which, even without new burdens, forced by the red pencil of the Ministry of Finances, have been reducing day by day their services to the population– many of them as essential as public transports, kindergartens, and so on. The answer coming from the ‘every man for himself’ ideology is the foreseeable one: let everyone round off beforehand their basic pension with a private complementary insurance that covers the vacuum up to the desired standard of living. Note: the employer shall not contribute to the funding of such private insurance.


Those who still believe that the social solidarity is what saves us from the law of the jungle –because without social solidarity we would certainly be in the jungle– ask: Who is going to fund it, then? If it has to be just the employee, perhaps they would prefer the current system to go on, with as high rates as it may be necessary, but of course, shared, as until now, by the employer. At least it would be cheaper for the economically modest employee than the private insurance, a solution preferred by the best placed ones.


No way!, the employers protest. The companies must be freed from the oppressing additional costs whatever happens. Those ‘additional burdens’, when increasing the price of the production, drown the capability of competition, dissuade the investors, compromise the location of companies, and inevitably kill jobs. We cannot deny that among the ‘additional costs’, the employer’s contribution to the endowment insurance is probably the most important one. Even the trade unions agree that if we want to fight against the unemployment we must reduce the costs of production –including the ‘additional’ ones.


Way out –rather in an interventionist than neoliberal way–: contribution of up to 4% by the State to the instalment of the private insurance funded only by the employer –and, for the moment, still voluntary.


Apart of all this pandemonium, –neoliberal in three fourths and just one fourth socially well-intentioned–, the pensions of the current pensioners, and of those that are 55 years old today, will remain at the present amounts; and from year 2002, they will increase in proportion to the evolution of the net salaries.


Will our children be safe from the deluge too?



Eduardo Espert