Germany maintains plans to increase retirement age to 67

Wed, 17 Nov 2010

Berlin - The German government decided Wednesday to stick to plans to raise the country's retirement age to 67, rejecting opposition arguments that it is difficult for people over 60 years old to gain or hold employment.

The decision came after Labor Minister Ursula von der Leyen presented a report showing that twice as many people over the age of 55 are now working as compared to 10 years ago, predicting that the upward trend would continue.

Germany has already legislated a gradual rise in the standard retirement age from 65 to 67 over two decades starting in 2012, but with a legal caveat that job prospects for older workers must improve.

Polls show that most Germans agree something has to be done to avert the bankruptcy of pension funds as life expectancy in Germany grows, but many also agree with the political left that employers tend not to select job applicants over 60 years old.

Chancellor Angela Merkel is potentially vulnerable on the issue. However, Germany has seen none of the rioting that recently racked France when Paris passed a law to gradually raise the retirement age from 60 to 62 by the year 2018.

Von der Leyen's data suggested that the German outlook has improved, with 38 per cent of all people aged 60 to 65 holding down a job. The remainder includes housewives, the long-term unemployed and people who have retired early due to disability.

Germany has a state pension system that uses incoming contributions from the working population to support the retired. Each pensioner can claim support proportional to what they earned in 45 years of work.

In an interview on ZDF television, von der Leyen rejected a proposal by Germany's unions to leave the retirement age at 65 and increase monthly contributions by workers instead. She said this would be unfair for younger Germans.

Annelie Buntenbach of the DGB trade union federation argued that the government should then put its proposal to increase the retirement age on hold "until at least 2020."

She said it is "unachievable" to get most older workers back into the workforce if they lose their jobs.

But Martin Dietz, an analyst at the German Institute for Labor Market and Vocational Research in Nuremberg, told the newspaper Financial Times Deutschland that hirings of older people are on the rise.

He said it is feasible to raise the employment rate of those over 60 years old to 50 per cent in the long term.

Source: Earth Times.
Link: http://www.earthtimes.org/articles/news/353912,increase-retirement-age-67.html.