Germany's coalition government has published its plans to secure longer-term funding for the state pension system, including setting up a €200 billion ($217 billion) fund by the middle of the next decade to invest in stocks.
According to the German Ministry of Finance, it is an independent public institution that will manage this fund, the funds of which will be provided through loans to the federal government and the proceeds from the sale of some government shares in companies. Starting around 2035, the proceeds from these investments will be transferred to the pension system; With the aim of ensuring the stability of retirement payments at the level of 48% of the retiree’s income at least until the end of the next decade. Bloomberg News Agency indicated that German Finance Minister Christian Lindner and Labor Minister Hubertus Heil presented this plan at a press conference in the capital, Berlin, on Tuesday, as part of the coalition government’s moves to re-equip the social insurance system in Germany, to overcome the problem of the high proportion of elderly people in society.
It is expected that an average of 10 billion euros will flow annually from the new investment fund into the pension system from the middle of the next decade.
The German Minister of Labor said that the government does not want to reduce the salaries of retirees nor increase the retirement age to confront the financial crisis of the country’s retirement system.
As for the Minister of Finance, he said that reducing the salaries of retirees or increasing the retirement age is not a long-term solution to the problems of the retirement system.
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