Pension Expert Warns of High Costs if Civil Servants Join Statutory System

Integrating civil servants into Germany's statutory pension insurance system would impose a massive financial double burden on the public sector, according to Peter Bofinger, a member of the Pension Commission.

"The state would have to pay pension contributions as an employer for new civil servants and also pay the pensions of current retirees," Bofinger explained in an interview with the Neue Osnabrücker Zeitung. This dual financial obligation would persist for approximately 40 years, until current civil servants reach retirement age. "This transition is the problem. If someone has a perfect solution, let them show it, but it is simply very difficult to implement," he added.

The Pension Commission's report identified a unified employee insurance, including civil servants, as the "ideal model for old-age security." However, the report also noted that this ideal might be "difficult to achieve in the foreseeable future." Federal Labor Minister Bärbel Bas (SPD) had previously expressed support for including civil servants in the statutory pension system.

Bofinger also called for a reform in calculating civil servant pensions. He pointed to a tendency for individuals to be promoted shortly before retirement to secure higher pension payouts. To counter this, he proposed that pensions be calculated based on the last five to ten years of salary, rather than just the final salary stage, which is currently the standard if held for at least two years. This contrasts with the statutory pension for employees, which considers earnings over their entire career. "We want to balance this difference somewhat," Bofinger stated.