A number of unions have raised concerns over plans to reform Germany's tax-supported private pension provision, with concerns that underlying political disagreements could be impacting policy.

The German Federal Ministry of Finance recently published its long-awaited draft bill to reform the private pension system, which aims to provide more opportunity, flexibility and transparency with new subsidized pension provision products.

However, Confederation of German Employers’ Associations (BDA) president, Dr Rainer Dulger, argued that the pension package does not belong in the Bundestag, “but in the museum of botched reforms”.

“Germany is facing a huge demographic challenge with the baby boomers starting to retire. The promise to guarantee a pension level of 48 per cent by 2039 is simply short-sighted and dubious in this situation,” he warned.

“Those who suffer and bear the burden are the younger generation, who are left with less and less net income from their gross income, and the employers, because the already high labour costs in Germany are rising even further.

“This is making work increasingly unattractive. The traffic light coalition should focus on sustainable reforms in company and private pension schemes.”

Dulger also pointed out that the second pension package would be "by far" the most expensive social legislation of the 21st century.

“The generational capital is certainly well-intentioned, but it is hardly more than a drop in the ocean,” he added.

Specific concerns have also been raised around the impact of political disagreements on the bill, with reports that, despite the bill being agreed to previously, the FDP is again calling for changes.

Indeed, IG Metall executive board member, Hans-Jürgen Urban, argued that while it has been promised many times to permanently secure the level of pensions - in the coalition agreement, by the leaders of the traffic light parties and in the federal cabinet - the FDP “doesn't care about any of that”.

He stated: "This is a debacle for the traffic light coalition and for politics, which is struggling for credibility. What the FDP is doing is a program to promote political disillusionment. And it is doing young people in particular a disservice.

"If the FDP should prevail and the promised protection of the level of pensions does not come after all or parts of the pension are linked to investment performance on the stock markets, it is precisely those people who will be threatened with insecure pensions in the future, which they claim to want to protect."

This was echoed by German Trade Union Confederation (DGB) board member, Anha Piel, who argued that "anyone who has worked all their life deserves a pension that allows them to live in dignity".

"It is also a question of trust in democracy to ensure a stable pension level for a reliable and higher pension for all generations. This is particularly worthwhile for younger people," Piel continued.

“If the past elections have taught the FDP one thing, it is this: There is currently no majority for client politics with redistribution from the bottom to the top. Nowhere.

“Nevertheless, the FDP and employers want to shift the costs of an ageing society onto the employees alone: That is what happens when pension contributions, half of which employers have to pay, are capped - and employees are expected to top up their pensions with more private provision, including gambling on the stock market."

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