Reforming the German Public Pension System

Chancellor Bismarck introduced public pensions in Germany more than 120 years ago. That system has expanded into one of the most generous pension systems in the world. Most workers receive virtually all of their retirement income from it. Costs are almost 12 percent of GDP, more than 2.5 times as much as the U.S. Social Security System. The pressures exerted by population aging, amplified by negative incentive effects, have induced a reform process that began in 1992 and reached its peak in the 2001 and 2004 reforms. The 2001 reform converted the exemplary monolithic Bismarckian public insurance system into a complex multipillar system. The 2004 reform converted the pay-as-you-go pillar into a quasi notional defined contribution (NDC) system. This paper delivers an assessment in how far these reform steps will solve the pressing pension problems in Germany.

The German Public Pension System: How it Was, How it Will Be

Germany still has a very generous public pay-as-you-go pension system. It is characterized by early effective retirement ages and very high effective replacement rates. Most workers receive virtually all of their retirement income from this public retirement insurance. Costs are almost 12% of GDP, more than 2.5 times as much as the U.S. Social Security System. The pressures exerted by population aging on this monolithic system, amplified by negative incentive effects, have induced a reform process that began in 1992 and is still ongoing. This paper has two parts. Part A describes the German pension system as it has shaped the labor market from 1972 until today. Part B describes the reform process, which will convert the exemplary and monolithic Bismarckian public insurance system to a complex multi-pillar system. We provide a survey of the main features of the future German retirement system introduced by the so called “Riester Reform” in 2001 and an assessment in how far this last reform step will solve the pressing problems of the German system of old age provision.

How an Unfunded Pension System looks like Defined Benefits but works like Defined Contributions: The German Pension Reform

This paper describes the German pension reform process 1992-2007 with a stress on a remark-able development: the public pay-as-you-go-financed pension system has almost silently moved from a traditional defined benefit system to a system which works in many respects like a defined contribution system. The paper combines economic with political considerations, hopefully offering a few lessons that are useful also for other countries.

Rentabilitätsvergleiche im Umlage- und Kapitaldeckungsverfahren : Konzepte, empirische Ergebnisse, sozialpolitische Konsequenzen

Die demographischen Veränderungen sind Auslöser einer grundsätzlicheren Debatte über Alterssicherungsverfahren, nämlich der Wahl eines effizienten Finanzierungsverfahrens der Altersvorsorge. Im Zentrum der Debatte steht immer wieder der Renditevergleich zwischen dem Umlage- und dem Kapitaldeckungsverfahren. Ihm gilt dieses Papier. Er ist keineswegs so einfach, wie es oft suggeriert wird, da Versicherungs- und Risikoaspekte, vor allem aber das Übergangsproblem berücksichtigt werden müssen. Der vorliegende Beitrag stellt den wirtschaftstheoretischen Hintergrund mit den wichtigsten relevanten Konzepten dar und präsentiert empirische Schätzungen zur heutigen und Simulationsergebnisse zur zukünftigen Entwicklung der relevanten Renditen. Wir schließen mit den sozialpolitischen Konsequenzen für eine reformierte Altersvorsorge

Notional defined contribution pension schemes: Why does only Sweden distribute the survivor dividend?

The aim of this paper is to analyse the role of the survivor dividend in notional defined contribution (NDC) pension schemes. At present, this feature can only be found in the Swedish defined contribution scheme. We develop a model that endorses the idea that the survivor dividend has a strong basis for enabling the NDC scheme to achieve financial equilibrium and that not including the dividend is a non-transparent way of compensating for increases in longevity and/or legacy costs from old pension systems. We also find that the average effect of the dividend remains unchanged for any constant annual rate of population growth, that contribu-tors who reach retirement age always get a higher return than the scheme does, and that population growth enables cohorts with more years of contributions to benefit to a greater extent from the dividend effect

SOCIAL DESIRABILITY AND CYNICISM: BRIDGING THE ATTITUDE-BEHAVIOR GAP IN CSR SURVEYS

Many consumer-focused corporate social responsibility (CSR) studies suggest a positive link between the responsibility demonstrated by a company and consumers’ intention to favor the company in their purchases. Yet an analogous causal effect between corporate social and financial performances is not evident. This chapter conceptualizes how social desirability and cynicism contribute to the discrepancy between consumers’ attitudes and their actual purchase behavior, and analyzes why consumer choices indicated in surveys do not consistently convert into actions

Health Care Services and the Elderly: Utilization and Satisfaction in the Aftermath of the Turkish Health Transformation Program

With the implementation of the health transformation program, Turkey has gone through substantial changes in its health system in the last decade. This study relies on two nationally representative data sets to investigate health service utilization and satisfaction of the elderly. In particular, it examines the share of elderly who have an unmet need for medical care and who could not afford a medical examination or treatment over the years 2006 to 2015, using data from the Turkish Survey of Income and Living Conditions. It also examines the utilization of health services and satisfaction from these services by the elderly in years 2004 to 2015 using data from the Turkish Life Satisfaction Survey. This study finds that utilization has increased and, coinciding with the introduction of the family medicine system, the percentage of patients choosing primary care facilities has increased. The share of the elderly with unmet need and those who could not afford health care have declined. Notwithstanding, overall satisfaction increased only until 2011-2012. Understanding the utilization and satisfaction of the elderly is important, because along with many other countries, the population is aging in Turkey. In the near future, health care needs of the elderly will have a higher priority on the agenda of policy makers