Experts demand cuts for better earning

System under pressure

Experts call for pension cuts from better earners

Experts cause a retirement with a study. The demand: a reform that relieves low -wage earners and asks high pensions to the cash register. What this means.

For many people in Germany, the legal pension is the most important protection in old age. Nevertheless, there are significant differences: While some pensioners can live comfortably from their references, others have to do with a small pension despite decades of work and even take on mini jobs to make ends meet.

In view of these challenges, Johannes Geyer and Peter Haan from the German Institute for Economic Research (DIW) propose a new adjustment of the statutory pension. According to their study, people with lower incomes would get more pension in order to be better secured financially. Gut earners, on the other hand, would have to adapt to lower pension payments – especially because they live longer on average.

The German pension system has been facing significant challenges for years. Demographic development means that more and more people retire, while the number of employees subject to social security are sinking to the pension fund.

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This imbalance puts a strain on the affiliation system and questions its sustainability. In addition, better earners not only benefit from higher pension claims, but also pay for longer retirement due to their longer life expectancy. These factors lead to tensions and discussions about distribution justice within the system.

Johannes Geyer and Peter Haan, social experts at the DIW in Berlin, presented proposals for the reform of the pension system in a special edition for the Bundestag election 2025. In your publication “DIW Aktuell” you advocate deviating from the previous equivalence principle, which says that every paid euro leads to an equally high pension entitlement.

Instead, they propose a progressive pension formula that stabilizes the pension level for people with low pensions and allows a reduction for people with higher pensions. This means that pension payments should be linked more to social factors. Low earners would therefore receive relatively more pension than high earners for their deposits.

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Geyer and Haan argue that people with higher incomes not only acquire higher pension claims, but also live longer and thus relate longer. Therefore, it is justified to take these differences into account more in future pension reforms. One possibility would be, for example, to increase high pensions from a certain amount in the course of pension increases. In addition, high pension claims for high earners could be reduced by a discount.

The discussion about a redistribution within the pension system is not new. As early as 2023, the economy proposed Monika Schnitzer that better earners should give part of their pension to increase the pensions of low earners. She argued that such a redistribution was necessary to prevent an increase in poverty in old age.

In contrast, the economist and pension expert Peter Bofinger warned against shortening the pensions because the pension is not an instrument for redistribution. In an interview with “Wirtschaftswoche” he described such ideas as “absurd” and emphasized the importance of the equivalence principle.

The economist and economy Achim Truger also warns of a departure from the equivalence principle. He emphasizes that the pension level could drop so much through certain reform proposals that it would be politically dangerous and that the trust of people would shake into German pension insurance. It should be feared that the service provider could turn their back on the system if their deposits no longer result in correspondingly high pensions.

It is also pointed out that the introduction of a progressive pension formula could be administratively complex and legally complex. Some experts also warn that such measures do not sufficiently solve the problem of old -age poverty, since they only redistribute but do not generate any additional funds.

The discussion about the reform of the pension system shows the complexity and the different interests of those involved. Experts indicate the urgency of making the pension as a future and fair. In addition to structural reforms of the statutory pension, a reform of private retirement provision also comes into the political focus.

While the FDP in the 2025 election campaign relies on the capital market with a pension pension and tax -funded pension schemes, the Greens want to create a sustainable alternative with a citizens' fund. The Union also provides action and suggests building capital for retirement provision at an early stage.