According to the financial projections of the Deutsche Rentenversicherung (DRV), Germany's statutory pension insurer, the contribution rate is expected to rise to 19.9% in 2028, with 20% conceivable in 2029, as reported in the financial plan published on Thursday. The rate currently stands at 18.6%, with employers and employees each paying half.
Given the pension insurer's reserves still being well-stocked for now, the DRV forecast the contribution rate would remain stable through the end of 2027. As early as next year, however, those reserves would be "largely depleted." "In order to prevent the reserve from falling below the minimum level of 0.3 months' expenditure, raising the contribution rate to 19.9% will be required in 2028," said Alexander Gunkel, chair of the DRV's federal board.
Gunkel also warned that rates could rise as soon as next year if the federal government proceeds with a planned €4 billion reduction in federal pension subsidies in 2027, as outlined in the federal budget framework. That would contradict the pension reform package passed by the legislature, under which the government had committed to financing the stabilisation of the pension level and the expanded mothers' pension "from tax revenues," Gunkel stressed.
A pension reform commission appointed by the government is expected to deliver its recommendations by the end of June. It must find answers to the problem that, given the ageing of society, fewer and fewer workers are financing more and more retirees. The approaches under discussion are primarily a higher retirement age, a lower pension level, and expanding the pool of contributors to the system.
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