One of Germany’s leading financial voices has criticised the country’s current pension system, saying it is no longer ‘up to date’.

Deutscher Paritätischer Wohlfahrtsverband managing partner, Dr Joachim Rock, said earlier this week that the current system is beginning to creak under the weight of Germany’s ageing demographic.

The problem, he added, was also being exacerbated by increasing lifespans and the current German civil service pension setup.

According to Rock, a large issue within Germany is that while the company has 20 million people collecting the state pension, there are a further 1.5 million civil servants who are collecting pensions without first having paid into the state system.

This state of affairs arises from Article 33 (5) of the Basic Law, which has existed since Prussian times.

That law, according to the newspaper Frankfurter Rundschau, states that there is an obligation on behalf of the state, “[…] to provide civil servants and their families with an adequate livelihood for life.”

The cost of this, according to the same paper, reached €53.4bn in 2022 and may rise to €90.7bn by 2040.

According to Rock, this system needs quick reform.

He said: "The integration of all working people into pension insurance secures the financing of old-age provision and creates more fairness within and between the generations."

Other reports on Buzzfeed this week highlight the often-patchwork nature of contracts between the German state and its employees. There are currently around 1.7 million teachers within Germany, with two-thirds of them employed as civil servants and the remainder as employees.

That report spoke to a teacher in the state of Baden-Wurttemberg, who said that she was employed as an employee in pay grade E 13. That meant, she said, her net pay was around €3,700 per month. A colleague with the same qualifications but employed as a civil servant would bring home around €600 more, as they had not had to pay into the state pension.

There are also bonuses such as child allowances for civil servants, which rise to €989.17 per month for a third child. Meanwhile, those on employee contracts are not eligible for these bonuses.

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