Statutory pension: parents are the big losers

A current study sees a skewed distribution of the pension burden to the disadvantage of parents. In addition, each child pays more into the pension fund in adulthood than he or she later receives as a pension benefit.

In a study, the Bertelsmann Foundation identified a "flaw in the system" of the statutory pension insurance that puts families at a disadvantage. On the one hand, under the current statutory pension system, a current child must pay more into the pension fund later than he or she will receive in benefits at retirement age. On the other hand, his parents do not benefit from it either.

On behalf of the Bertelsmann Stiftung, Professor Dr. Martin Werding of the University of Bochum in the study "Families in the statutory pension insurance: The pay-as-you-go system put to the test", how the payment flows as contributors to the pension insurance and as pensioners in the phase of retirement. As a result, not only is the sustainability of the pension system in doubt.

Disadvantages for current parents and their children

In fact, it also identifies a strong imbalance in the treatment of parents and the childless, whose pensions would have to be paid for by the next generation. According to Weding's calculations, for example, a 13-year-old child today pays an average of 77.000 euros more into the pension fund than it will once get out.

But the parents also have no advantage from this surplus into the pension fund, which they have made possible by starting a family in the first place. On the one hand, they do not pay less contributions than childless people into the pension fund, and on the other hand, having a child does not significantly increase their own pension.

Pressure to act could create justice

In principle, a pay-as-you-go system works in such a way that the active population pays for pensions. According to experts, however, the low birth rate will ensure that the number of people in work will fall in the long term – even if immigration gains are currently compensating for this. On the other hand, the number of pensioners is rising, with longevity ensuring that pensions are drawn for ever longer. The state already pays more than 80 billion euros into the pension fund every year to stabilize the system.

Whether or not the distribution of the burden among contributors (with and without children) is fair raises constitutional questions, according to the study. The Federal Constitutional Court had already ruled that there was an imbalance in the social long-term care insurance system. Here's why childless people pay 0.25 percentage points more in premiums today. Lawsuits are also currently pending on pension insurance, the study says.

Security for the individual

Those who want to ensure that they are financially secure in old age, despite recurring difficulties in financing the statutory pension and possible changes to pension entitlements, should make provisions early on.

When determining how high the statutory pension is likely to be and how much income would be needed to secure the standard of living, a Fischer & Fischer insurance specialist.

It can also provide tips on which individually suitable pension options, some of which are even state-subsidized, are the best way to close an income gap.