Development tendencies and challenges

The German pension scheme’s main weak point is that through the predictable demographic changes, financial turmoil will arise: If more and more retirees need to be supported by fewer and fewer people in gainful employment, the system will lose its balance and collapse sooner or later.

To counteract this circumstance, different approaches that can also be combined could be used. In the future, if Germans are born after 1964, they will not be able to retire at 65, but only at 67. Furthermore, a change of the pension formula as well as higher tax funding could help stabilizing the system. An additional private and possibly operational retirement provision will, however, remain essential.