(de-news.net) – Martin Werding, a member of Germany’s Council of Economic Experts, of the Federal Government’s Old-Age Security Commission, and a professor at Ruhr University Bochum, has cautioned against incorporating civil officials into the statutory pension system, arguing that such a reform would weaken rather than reinforce public finances. In his assessment, the inclusion of civil servants would fail to generate a net fiscal advantage unless public authorities were willing to accept substantial and persistent budgetary deficits. This warning was issued even as the Council of Economic Experts has repeatedly advocated reforms to civil service pension arrangements aimed at enhancing their long-term sustainability and ensuring that future pension reforms are applied uniformly to civil servants as well as to other insured groups.
According to Werding, the central fiscal challenge arises from the obligation that would fall on the state to pay employer contributions on behalf of civil servants once they were integrated into the statutory system. As a result, overall public expenditures would rise markedly. Based on projections prepared by the council in 2023—which Werding indicated remain broadly applicable—the additional costs would amount to approximately 10 billion euros by 2035, increase to about 20 billion euros by 2040, and reach roughly 70 billion euros by 2060. The distribution of this burden would be uneven across levels of government: more than two-thirds would be borne by the Länder, around one-sixth by the federal government, and the remainder by municipalities. He further stressed that such a structural change would unfold only gradually over a prolonged period. Even if contribution payments for all newly appointed civil servants were introduced immediately, comprehensive coverage of all active personnel would not be realized until around 2070, while existing pension entitlements under the traditional system would persist far longer, disappearing only after 2090.
VdK and SoVD support broader social insurance financing
By contrast, the Social Democratic Party’s proposal to broaden the funding base of statutory health and long-term care insurance by systematically including rental and capital income received strong support from Verena Bentele, president of the Social Association VdK. She characterized the initiative as the realization of a long-standing core demand of the association and argued that substantial profits derived from property ownership or financial investments should no longer remain outside the financing of social insurance schemes. At the same time, she underscored the importance of designing sizeable exemptions, emphasizing that carefully structured and generous allowances would be necessary to ensure effective protection for small savers.
A comparable position was articulated by Michaela Engelmeier, chair of the Social Association of Germany (SoVD). From her perspective, extending contribution obligations beyond earned income to include revenues from capital, leasing, and renting was appropriate, provided that the contribution assessment ceiling in health insurance was raised to the significantly higher level applied in the statutory pension system. She maintained that such an adjustment would strengthen the system’s financial capacity, broaden the overall revenue base, and lead to a more equitable distribution of contribution burdens across low-, middle-, and high-income groups.
