Pay-as-you-go state pension – Why it is challenged by Germany's demographic developments
Despite a well-established occupational pension system, employee participation in Germany is only about 50 % overall and in the significant segment of SMEs at only 30 %. Due to a complex and inflexible system, portability between employers is limited.
The demographic developments of an ageing society challenge Germany's pay-as-you-go state pension system. Added to this are assets under management that have stagnated in recent years as well as the Riester-Rente with a participation rate of just 50%.
Peter Nies, CFA and Martin Hermann, CFA have proposed two models in their position paper. Following the model of Collectum, a platform for the ITP occupational pension scheme in Sweden, a state platform should be established in Germany. In addition, the pension system is to be made equally accessible to all occupational groups.
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