The Organization for Economic Cooperation and Development (OECD) has released a report on the retirement systems of 34 industrial countries and show that poverty threatens Germany, too as Deutsche Welle reports.
The results of the report were presented on Tuesday at Berlin and there were not very promising for German pensioners.
Even though, Germany has been a role model in many social sectors, has not find an efficient solution to take care of its citizens as they age.
OECD retirement expert Monika Queisser reveals the problem which lies with Germany’s retirement system. “One hundred percent orientation on income means that there is hardly any redistribution for those who are socially vulnerable. Switzerland, New Zealand and the Netherlands have better regulated their systems for those with low paying jobs or physical disabilities.”
This mean that those who earn a lot while working automatically have larger amounts of money deducted from their salaries and pay more into national retirement funds, thus receiving higher retirement payments as seniors.
On the other hand, those who earn less, pay less, and they must be able to finance themselves when retiring. The only solution is to save money while working, but those who earn less money, are not able to put away some money at the end of each month.
In order to maintain relatively adequate pension levels for the elderly, half of the OECD countries have either changed their retirement systems or adapted them to current societal developments, says Deutsche Welle.
In Germany, the retirement age at with a full pension payment was raised from 65 to 67. Other countries lowered pension payments and things seem to be heading in that direction in Germany as well.
Other countries, such as Switzerland, New Zealand, Denmark and the Netherlands, have applied a different method. They use a base pension, a fixed amount of money guaranteed for every citizen, no matter how much he or she earned throughout their working career. The base payment is usually lower than an average pension in Germany, but a guaranteed pension would protect the socially vulnerable from poverty in old age.
