Challenges of the Pension Reform and the Generational Capital Plan

Nothing can be done about the third weakness: the planned fund comes too late and has therefore missed many good years on the capital market. This is all the more bitter because of the fourth mistake: Ultimately, the capital should be raised through loans, and they now cost interest – so reduce the return. So it remains very doubtful that the fund can achieve the goal set out in the coalition agreement: it is intended to stabilize pension levels and contribution rates.

Minister of Labor Hubertus Heil will probably repeat this claim when he presents the announced pension package soon. But he should admit that generational capital in the currently known framework – credit-financed savings until 2035 – cannot even begin to plug the holes in pension insurance. It is more of a symbolic first step towards funding.

Young people are already one step ahead

The generation that all of this is about did that a long time ago. Many trainees and students set aside their tens for ETF savings plans every month and organize their private stock pension – without government subsidies and hopefully without credit financing. For them, stocks and pensions go together as a matter of course – if you start early enough and have realistic expectations.