The Organization for Economic Co-operation and Development (OECD), in a report titled “Renten auf einen Blick 2019” (“A Brief Review of Pensions 2019”), showed a large gap in the value of pensions for residents of Germany, including , for women, self-employed persons and also those with low incomes, from the OECD average.
Many older people in Germany are fairly well off financially. However, when compared with pensions in other OECD countries, it turns out that the German pension is not so good. And for some positions, according to demographers and sociologists, it is just right to hang out the red lantern of danger.
According to the latest OECD data, the employment rate for persons aged 55 to 64 in Germany has increased by 34% from 2000 to the present, while the average for OECD countries has increased by only 18%. This means that the number of middle-aged and elderly people in Germany who are forced or willing to work has almost doubled than in the rest of the OECD countries. OECD head of social policy Monika Queisser criticizes the fact that OECD countries such as Italy, the Netherlands and Slovakia have rolled back reforms for longer employment. For Germany, she recognized that raising the retirement age, and with it an increase in the duration of work, is associated with an increase in life expectancy: since 2012, the retirement age has gradually increased to 67 years.
A German worker who has worked full-time for 45 years and retired in 2018 will receive a pension that will average only 52% of his last monthly salary. On average for 35 countries covered by the study, this figure is slightly higher and amounts to 59%. Low-wage German worker who retired in 2020 will receive a pension equal to 56% of his last earnings; for OECD countries this figure is much higher: 68%.
Does this mean that the provision of older people in Germany is very low? The researchers answer this question in the negative, because the pension for the inhabitants of Germany, as a rule, is not the only source of income. The average income of people over 65 in Germany is almost 89% of the average income of the country’s population as a whole. On average, according to the OECD, this figure is 87%; for countries such as France, Luxembourg and Israel, it is higher, for Austria, for example, it is only 72%.
In Germany, the pension for women over 65 is 46% lower than for men of the same age. These indicators have remained virtually unchanged from the study conducted two years earlier. “This is an old German problem,” says Reinhold Thiede, head of research for pension insurance (Leiter des Geschäftsbereiches Forschung und Entwicklung bei der DRV).
Alex Gradov
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