Big shake-up in German Gov’t Pensions
The German parliament on Thursday passed a modified version of legislation that will radically change the way national pension benefits are calculated.
In the future, the level of retirement benefits will depend on the size of the workforce in relationship to the number of retirees. Pensions will automatically decline as the German population shrinks over the next 25 years.
The government hopes the legislation will keep payments into the pay-as-you-go national pension system below 22 percent of gross wages in 25 years when there will be just over two workers to support each retired person.
Now there’s a precedent for this when it comes time to rehaul Social Security.