Suchergebnisse

Abstract
German pension policy faces a dilemma. If it is too generous, it harms contributors, disincentivises labour supply, and crowds out education and infrastructure investment needed to pay for social protection. If it is too frugal, it harms those with social and health issues. Thus, smart compromises are required rather than maximum demands. We propose a policy mix with five elements: 1) determine the pension level in a sustainable and generation-appropriate way; 2) link retirement age to life expectancy; 3) limit early retirement to those in poor health; 4) abolish mandatory retirement; 5) encourage a mix of pay-as-you-go and funded occupational pensions.

Aim of this keynote is to develop a framework how to approach the design of pension policies as rationally as possible. The first step is to realize and accommodate endogenous adjustments. The second step is to align the root causes of demographic change with corresponding reform steps which include but are not confined by pension reform. The third step is to separate the issues as best as possible to strengthen the political feasibility of reform. The paper shows that relatively few and moderate reform steps suffice to solve the demographic problem in countries such as Germany and Switzerland. This is in striking contrast to the widespread resistance to reform. We falsify some of the myths, prejudices and misperceptions which make reforms politically so hard to put into place.