Traffic light parties to retirement: Retirement planning with stocks and bonds


As of: 27.10.2021 2:18 p.m.

The possible traffic light coalition of the SPD, Greens and FDP wants to finance part of the statutory pension in the future on the capital market. She is examining a new fund for private provision. But do the plans go far enough?

Shares for the pension fund, that’s new – the SPD, Greens and FDP provide ten billion euros from budget funds in the exploratory paper. The Deutsche Rentenversicherung is to receive the money from the federal budget in the coming year in order to invest it in the capital market. This means entering into a partial funding of the otherwise pay-as-you-go statutory pension – if the three parties should actually form a coalition at the end of their negotiations. The hope behind it: The earnings on the stock market should help to stabilize the pension, despite the demographic change.

However, ten billion euros is not a lot of money in relation to the expenditures of the pension insurance. Johannes Geyer from the German Institute for Economic Research in Berlin (DIW) therefore considers the sum to be far too low. “An amount in the three-digit billion range would be necessary. With its income, one could actually support the pension, ie dampen the increase in contribution rates and stabilize the level,” says the pension expert.

Demand for significantly higher cash flows

For this, the potential coalition partners would have to take significantly more federal money than ten billion euros. “It would make more sense to invest a small part of the statutory pension contributions on the capital market over the long term,” says Ute Klammer, director of the Institute for Labor and Qualification at the University of Duisburg-Essen.

This is how it is done in Sweden. There, 2.5 percent of the statutory pension contribution is compulsorily invested in stocks and bonds. The FDP had proposed something similar in its concept for a statutory share pension, but was unable to enforce it in the exploratory talks. What remains of the Swedish model after the exploratory talks is an idea for private pension provision, i.e. a voluntary additional offer – and this “offer of a publicly responsible fund” is what the possible coalition partners initially only want to examine.

How could such a fund work?

It is basically a pension fund for everyone, a cost-effective standard product that is publicly administered and is intended as a supplement to the statutory pension. The goal: no unnecessary costs and agency commissions, but higher returns and thus more money that goes to the pensioners.

The Federation of German Consumer Organizations (VZBV) has long been calling for such a publicly organized product for private provision. It would be conceivable: A public agency goes on behalf of the citizens with their funds bundled on the capital market. The respective amount could, for example, be automatically deducted from the wages via the employer, provided employees do not object. “Deutsche Rentenversicherung or the Bundesbank, for example, could be used as a carrier,” says financial expert Dorothea Mohn from the VZBV. But the consumer advocate also believes that a new authority that still needs to be set up is possible.

Many questions unanswered

The state authority could then tender the actual investment of the money in the capital market to a private provider. Many details in connection with a publicly administered pension fund would have to be clarified by the future government parties.

For DIW scientist Geyer, for example, the following questions arise: “Which groups of people actually pay into the fund? What about people who are about to retire? What about the self-employed? What about the unemployed?” Researcher Klammer believes that what the investment would look like in concrete terms and who determines it is crucial. The professor would not find a regulation that was too rigid. “On the other hand, you see in countries like England or partly the USA that people are suddenly deprived of all their retirement savings because they were invested too risky.”

For the financial expert from the Federation of German Consumer Organizations, one thing is certain: “Such a fund must be a combination of stocks and bonds.” First of all, the money should be invested in good, high-yield stocks for as long as possible, says Mohn. As retirement approaches, the investment must increasingly be shifted into secure bonds.

Protection against misuse is important

From the point of view of the financial scientist Bernd Raffelhüschen, the question of how a publicly managed fund would be secured against access and misuse by the state should also be answered by politicians. In this context, the Freiburg university professor considers individual contribution accounts to be mandatory for protection and control. For the consumer advocate Mohn, it would be a basic condition that the respective shares in the public fund would be booked on individual contribution accounts and would thus be clearly private property of the consumers.

Experts do not see advances as a solution to the problems

In principle, DIW pension expert Geyer considers a standard product with low costs for private provision to be sensible. In his view, however, that does not solve the immediate problems that the pension is facing. “In the next ten years we in Germany will probably be confronted with rising contribution rates and falling pension levels, and building up such a funded pillar will take too much time, it won’t happen overnight.”

Economist Klammer does not want to condemn a publicly administered pension fund with low costs across the board. However, she thinks it is wrong that the deposit should not be compulsory. Because then too few would pay in, she believes. The professor is convinced that the SPD, Greens and FDP have not yet done their homework with their previous pension plans. In view of a longer life after employment, it should be talked about that each individual spends more money on their own old-age security. “The amount of the contribution must not be sacred,” she warns.

Since the current plans of the potential coalition partners are only a voluntary additional offer and a large part of the population has hardly any money left over for it, the financial expert of the German Consumer Association is also convinced: “More profitable private provision is important, a publicly managed fund is however does not solve the main problem of the pension. ” According to Mohn, the greater need for action is to stabilize the statutory pension insurance.

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