Saturday, May 8th, 2021
Three to four billion euros
Pension payments rise due to crisis
In the corona crisis, wages are falling. However, after the end of the pandemic, they are likely to rise again. According to a report, this means that pension insurance will have to pay out additional billions every year.
The corona crisis is increasing pensions. The ups and downs of the economy in the pandemic mean that payments will be three to four billion euros higher annually in the future, reports the Frankfurter Allgemeine Sonntagszeitung (FAS) citing the Max Planck Institute for Social Law and Social Policy.
Next year, this additional pension increase will amount to four billion euros, said Max Planck Professor Axel Börsch-Supan of the FAS. In the following years it will be three billion euros, permanently. “Because of the catching-up factor that has been suspended, this will add up to almost 100 billion euros by 2050.” The figures are adjusted for inflation.
According to the report, the background is the effect of the so-called pension guarantee. Because of the pandemic, wages in Germany fell last year, the pension insurance company reports a decline of 2.3 percent – but the pensions are not falling accordingly. After the crisis, wages will return to their old level. This in turn applies to the pension as a wage increase, and the pensions rise with it.
Since 2018, pensions have also increased even if the wage increases only offset earlier wage declines. At that time, the so-called “catch-up factor” was eliminated in the pension. The effect: The ups and downs of the economy increase pensions, even without wages rising. The German pension insurance referred to the FAS on statistical special effects. They made the calculation difficult.
The Ministry of Social Affairs emphasized that pensions will not increase this year. The pension policy spokesman for the FDP parliamentary group, Johannes Vogel, criticized the increase in pensions: “The figures again demonstrate what we have been demanding for a long time: the federal government must reintroduce the catch-up factor,” he told the newspaper. “I am happy about every cent that pensioners have more in their pockets. At the same time, it is a question of fairness that wages and pensions move in lockstep over the long term.”
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