Category: Lenders

Concept to be submitted for a lifetime benefit pension in 2016

There is movement in the Lebensleistungsrente. Federal Labor Minister Andrea Nahles (SPD) announced yesterday Monday to present a concrete proposal for a new pension package later this year. So far, the planned increase in pension benefits for low-income earners has been postponed again and again. Unclear is above all the financing.

With the Lebensleistungsrente is apparently the next pension reform after the introduction of the pension at 63 and the mother’s pension. The project was recently on ice and it was questionable whether the pension increase for low-income earners will actually be implemented in this legislative period . On Monday, Labor Minister Nahles announced that they would submit a proposal for the organization of the solidarity-based pension already this year.

These are the plans for the life benefit pension

With the Lebensleistungsrente people are to be financially supported in old age, despite having a long working life not enough pension claims have collected in order to get over the subsistence level. Above all, low-income earners are affected . The plans are to increase the pensions of employees who have paid at least 40 years contributions to the statutory pension insurance, but accumulated less than 30 points of remuneration. This currently corresponds to a monthly pension of around 812 euros (new federal states) or 877 euros (old federal states) .

Furthermore, there was a transitional arrangement for people in the new federal states, who can qualify for the pension increase until 2023, even with 35 contribution years . Up to five years of unemployment should also be treated as contribution years. However, there is still no bill on the Lebensleistungsrente , therefore changes in the conditions are possible at any time.

Financing the life benefits pension is still unclear

While there are already more concrete plans for the eligibility for the Lebensleistungsrente, the question of financing Nahles should face a major challenge. Because it is clear that the pension increase can not be paid from the pension fund , since this is a ” non- insurance” performance. So only control means to realize the project . Federal Finance Minister Wolfgang Schäuble (CDU) could oppose this. Originally designed by former Labor Minister Ursula von der Leyen (CDU), the Lebensleistungsrente was estimated at an annual cost of 4.6 billion euros in 2013.

Compared to the Frankfurter Allgemeine Zeitung, the pension policy spokesman of the Union’s parliamentary group Peter Weiß said accordingly cautiously in view of a possible bill: “We are curious what the Federal Minister of Labor will present – and above all, which financing proposals she submits to it.”

How realistic is the life benefit pension until 2017?

The coalition agreement stipulates that it is expected to be implemented by 2017, albeit subject to funding . In other words, if Schäuble disagrees or does not find the government to compromise on financing, then it is unlikely that Nahles will prevail. According to the financing, the Lebensleistungsrente could fail in the end.

At the same time, the government is still dealing with other pension policy issues. So there are plans to reform the company pension scheme . The opposition is also working on new pension concepts such as the Germany pension. It is quite possible that the Lebensleistungsrente will therefore not get underway until next year – and then go down in the Bundestag election campaign.

Categories: Lenders