Missing Targets: An Analysis of the New Basic Pension

The basic pension, which came into force in Germany on January 1, 2021, was advertised with the claim that it would prevent old-age poverty and that its complicated design would make it particularly targeted. Axel Börsch-Supan and Nicolas Goll examine whether the basic pension actually fulfills this claim. This is not the case. On the one hand, 75.9 percent of pensioners who are considered poor under the new law are not entitled to a basic pension. On the other hand, 21 percent of those eligible belong to the wealthier half of German pensioners. The new law reaches too few of those who actually need assistance and provides benefits to too many who do not.