Wednesday 22 July 2009

Moving up the age of retirement

A new idea has been spread in Germany: to move up the age of retirement to 69. Not immediately, but some time in the future, e.g. in 2060. See, for instance, the respective article in the German newspaper FAZ.

A couple of years ago the German parliament decided to move the age up from 65 to 67. The change process was decided to take place over a period of roughly 20 years, adding 1 month per year. The main reason for these proposed changes are that our current social welfare system is not fully capable of coping with the increase in average life time of people and that the birth rate has fallen dramatically since the 1970s. In effect, in a couple of years there will be far more old age people compared to people being employed and paying taxes and bearing the cost of the pension scheme.

Now, regardless of whether this is true or false, regardless of whether people will really continuously grow older, live longer, enjoy health and happiness longer than before, etc. - there remains one critical question to me: Why introduce the changes in 20 and more years only?

The problems are around already today. And the future impact can be forecast today pretty accurately, as well. In terms of justice and solidarity between generations: Wouldn't it be appropriate to move up the age of retirement right away and use the additional money to be got for accrued reserves for future generations?

Whatever the burden needs to be, in a just society it cannot all be put onto future generations, can it? Otherwise all such proposals and decisions of politicians and officials made a couple of years before they go into early retirement sound rather cynical and egotistic. What is needed is not sexy headlines in the press, but a solid concept how society can manage the required transformations over the next decades in a joint, common and reasonable way.

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