Germany’s retirement income system comprises an earnings related pay-as-you-go system based on the number of pension points earned during an individual’s career; a means-tested safety net for low-income pensioners; and supplementary pension plans which are common amongst major employers. These plans typically either adopt a book reserving approach, with or without segregated assets, or an insured pensions approach.

The overall index value for the German system could be increased by:

  • increasing the minimum pension for low-income pensioners
  • increasing coverage of employees in occupational pension plans
  • increasing the labour force participation rate at older ages
  • improving the level of communication from pension arrangements to members

The German index value fell slightly from 62.2 in 2014 to 62.0 in 2015 due to a number of small changes.



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