Table 2 Pension reforms since 1989. (Source: Schulze and Jochem (2007); www.bmas.de)
Year enacted | Name | Parties in government | Government majority in Bundesrat? | Consent Bundesrat required? | Both SPD and CDU/CSU support reform? | Reform content |
|---|---|---|---|---|---|---|
1989 | Pension Reform Act 1992 (Rentenreform 1992) | CDU/CSU & FDP | Yes | Yes | SPD involved in formulating legislation | Shift from gross to net wage indexation |
Higher retirement age for women, unemployed, disabled | ||||||
Introduction of deductions for early retirement | ||||||
Increase in child rearing credits from 1 to 3 years | ||||||
1997 | Pension Reform Act 1999 (Rentenreform 1999) | CDU/CSU & FDP | No | No | No | Introduction of demographic factor |
Increase in child credits from 75 to 100 % of average wage (max three credits per child) | ||||||
Modest cuts in disability benefits | ||||||
1997 | Law for financing an additional federal subsidy to the statutory pension system (Gesetz zur Finanzierung eines zusätzlichen Bundeszuschusses zur gesetzlichen Rentenversicherung) | CDU/CSU & FDP | No | Yes | Some SPD states in Bundesrat support legislation | Increase in federal subsidy to pension system through 1 % point increase in VAT |
1998 | Pension Correction Act (Gesetz zu Korrekturen in der Sozialversicherung und zur Sicherung der Arbeitnehmerrechte) | SPD & Greens | Yes | Yes | No | Cancellation of the demographic factor |
Cancellation of cuts in disability pensions | ||||||
2001 | Altersvermögensgesetz (AVmG) | SPD & Greens | No | Yes | Some CDU states in Bundesrat support legislation | Introduction of voluntary, subsidized private pensions |
2001 | Altersvermögensergänzungs-gesetz (AVmEG) | SPD & Greens | No | No | No | Net replacement rate for statutory pensions cut from 70 to 64 % of average wages |
Max. contribution rate 20 % until 2020 | ||||||
Introduction of means-tested minimum pension | ||||||
Reduction of survivor’s pension from 60 to 55 % of deceased’s benefits | ||||||
2004 | Rürup Reform RV-Nachhaltigheitsgesetz | SPD & Greens | No | No | No | Introduction of sustainability factor |
Max. benefit cut not less than 46 % of average wage | ||||||
Less favorable indexation | ||||||
Suspension of pension adjustment for 2004 | ||||||
Abolition of credit points for higher education | ||||||
Retirement age for unemployed and partial pension raised from 60 to 63 | ||||||
2004 | Law on income in old age Alterseinkünftegesetz | SPD & Greens | No | Yes | Some CDU states in Bundesrat support legislation | Switch from taxation of pension contributions to taxation of pension benefits |
Introduction of unisex benefits in Riester Rente | ||||||
Streamlined rules for Riester Rente products | ||||||
2007 | Gesetz zur Anpassung der Regelaltersgrenze an die demografische Entwicklung und zur Stärkung der Finanzierungsgrundlagen der gesetzlichen Rentenversicherung (RV-Altersgrenzenanpassungsgesetz) | SPD & CDU/CSU | Yes | No | Yes | Gradual increase in “standard” retirement age from 65 to 67, starting in 2012 |
2014 | Pension package Pensions for those with long work histories (Lebensleistungsrente) Mothers pension (Mütterrente) | CDU/CSU & SPD | Yes | No | Yes | Full pension at age 63 for those with 45 years of earnings |
Mothers of children born before 1992 receive child-rearing credits | ||||||
Modest increase in disability pension |