Partially unfair business?: Traffic light pension experts are critical of point purchases

Partly unfair business?
Traffic light pension experts are critical of purchasing points

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If you want to retire early or do not reach the minimum insurance period, purchasing pension points may be an option. The FDP pension expert Kober criticizes the system at a certain point and calls for incentives for early retirement to be put to the test.

Leading pension experts within the traffic light coalition are questioning the possibility of buying earnings points from the German Pension Insurance (DRV). “People who buy pension points but then decide not to retire early create more pension income for a while because more contributions are paid. But as soon as these people retire, you’re stuck the problem of higher demands that they have acquired as a result, while at the same time there are fewer contributors due to demographic change,” said the labor market and social policy spokesman for the FDP parliamentary group, Pascal Kober, to the newspapers of the Funke media group. He called for incentives for early retirement to be put to the test.

Pension points or earnings points can be purchased by insured people who are aiming for early retirement. However, anyone who ultimately does not retire early will not receive back any voluntary contributions they have paid and will still benefit from a higher pension – for the rest of their lives. Earned pension points can offset deductions that become due in the event of early retirement. According to the latest DRV figures, contributions to compensate for a reduction in pensions amounting to a good 1.1 billion euros were paid in 2022. That was more than ever before. In 2022, purchasing a pension point was particularly cheap because of the previously reduced preliminary average gross salary. In 2022, according to the DRV, one pay point cost 7,236 euros; this year, a good 8,400 euros are due.

Also critical view from SPD

When asked by the newspapers of the Funke media group, the coalition partner SPD said that it viewed the purchase of pension points beyond the current possibilities critically. “The resulting subsequent claims would have to be financed by the contributors through the levy financing. However, it is not certain that sufficient voluntary contributions will be paid at this point in time,” said the parliamentary group’s labor market and social policy spokesman, Martin Rosemann. An individual decision by individuals would therefore have an impact on the contribution rate of all employees. That doesn’t work.

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