ifo Dresden berichtet 4/2017

Save time, so you have... money in the election year? An overview of the civil servants pension funds of the countries

In this article we give an overview of the civil servant pension funds of the Länder in Germany. The funds were invested to cover future pension payments to civil servants and differ noticeably between countries in terms of construction, investment strategy and volume. We go into these institutional differences in more detail, discuss the theoretical advantages and disadvantages of pension funds and pay-as-you-go systems, and finally empirically show that strained state budgets and state election dates are accompanied by lower allocations to pension funds. In election years, the Länder reduce their allocations to pension funds by an average of around one-sixth compared with non-election years.

Kulawik, Jakob, Rösel, Felix and Thum, Marcel