Eastern pensions can rise three times as much as in the west

eastern pensions can rise three times as much as in the west

There, the pension increase will be "in a rough order of about one percent", in the east it could amount to an increase of three percent "with all reservations". This was stated by annelie buntenbach, chairwoman of the board of management of deutsche rentenversicherung bund, in wurzburg on tuesday.

In the current year, pensions for some 20 million elderly people had been raised by 2.26 percent in the east and by 2.18 percent in the west. The exact adjustment for mid-2013 will not be known until next spring.

With the split increase, the pension level in the east was allowed to converge further with that in the west: currently it is 88.8 percent, after the adjustment it will be 91.0 percent of the western value. "Both pension values are getting closer as a result," said buntenbach. An automatism for the complete alignment can not be derived from it however. This will have to be decided by the next federal government.

According to pension experts, the difference in the increase between west and east is due to "technical factors" in the calculation of pensions, such as the different development of insured incomes. In addition, in the west, there is still the outstanding settlement with an omitted pension reduction in the economic crisis of 2009.

The bottom line, according to the pension insurance fund, is that this will lead to an unusually large gap of two percentage points in the next pension increase in mid-2013. In the election year, this was allowed to lead to heated discussions. Buntenbach therefore called for the suspension of the catch-up factor: without it, the pension increase in the west could be 0.7 percentage points higher.

According to buntenbach, the pension contribution rate will probably remain stable at 18.9 percent until 2017 under the current conditions. At the upcoming turn of the year, the tax rate is expected to drop from 19.6 to 18.9 percent, unless the federal council raises objections. Employees and employers will each receive a 3.1 billion euro reduction in their annual salaries. The federal budget could then be relieved by about 1.7 billion euros.

Buntenbach gave the net pension level for 2013 (after deduction of social security contributions, but before taxes) as 49.6 percent. By 2030, it will drop to 44.8 of the average income according to the current legal framework conditions. If this reduction – as sought by the SPD – were to be prevented, it would cost about 20 billion euros or two additional contribution points, according to the pension insurance fund.

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