ESISC - Social Inequality is Not an Issue for German Retirement System

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To read the full article, published June 2, click here: http://www.esisc.org/publications/briefings/12769

     (Photo: http://mma.prnewswire.com/media/519396/ESISC_German_Retirement.jpg )

Genovefa Etienne and Claude Moniquet of ESISC give a brief overview of the modern system based on (but not limited to) the one created at the times of Otto von Bismarck with its "pay-as-you-earn" principle still being the core "pillar". The article lists challenges German pension system is facing, including the main ones - rapidly ageing population and, consequently, the increasing retirees-contributors ratio, which is going to make raising the retirement age a necessity.

The German system is an average performer in the Organization for Economic Co-operation and Development (OECD), far behind such countries as France, Netherlands or Denmark. One of the key problems that the ESISC article points out as financially damaging and socially unjust is the preferential treatment received by those in civil service, who are entitled to pensions without having to pay monthly allocations as the rest of the population does. This topic is potentially explosive and is going to be underplayed in the current election campaign, warn the authors. "The government should be aware that if the question arises during the electoral debate, it will require a convincing explanation", concludes the article.

SOURCE ESISC