Finance Minister Lars Klingbeil supports the proposal by the DGB union to make company pensions mandatory. The measure aims to strengthen retirement savings on the basis of the state pension. However, the background reveals a transfer of risk: the state anticipates the collapse of the public pay-as-you-go system and prefers that citizens assume the volatility of financial markets.
How the new forced savings model works 📊
The plan would require each worker to allocate a fixed percentage of their gross salary to a private or union-managed pension fund. These funds will invest in financial products such as bonds, stocks, or ETFs, whose performance will depend on the economic cycle. Unlike the public pension, there is no state guarantee on the accumulated capital. The young worker will see their net salary reduced, while companies could decrease their contributions to the public system, easing their tax burden.
Germany discovers that money doesn't grow on trees 🌳
Unions applaud the measure because they will receive commissions for managing these funds. Companies are delighted: they will be able to reduce what they contribute to the state. And the young worker, with luck, will discover that their future pension depends on whether the stock market goes up or down. Best of all: no one guarantees anything. So, if the markets crash, you can always console yourself by thinking that at least your net salary was lower. What a relief 😅