Pension

The causes of the looming financing difficulties in the pension insurance system are the declining birth rate since the early 1970s on the one hand and increased life expectancy on the other – both being developments that go back a long way. However, the demographically induced increase in pension insurance expenditure is compounded by the additional burdens that policymakers have generated in recent years through substantial benefit expansions. These include the extensions to the maternity pension, the introduction of the pension at 63, reforms to the reduced earning capacity pension, the double stop line, the basic pension, and the suspension of the catch-up factor introduced in 2008. These pension reforms have increased the pension entitlements of certain select groups of people and partially reversed efforts to stabilize the pension fund (such as the introduction of the sustainability factor in 2004 and the gradual increase in the regular retirement age to 67 starting in 2012).