Statutory Principles
Social Code, Part VI Statutory Pension Insurance
Fourth chapter, First Section, Second Subscetion
§ 154 Pension Insurance Report, Contribution Rate Stabilization and Guarantee of the Pension Level
(1) The German Federal Government draws up a pension insurance report every year. The report includes
- 1. model calculations on income and expenditure trends, on the fluctuation reserve as well the necessary contribution rate for the next 15 calendar years. These are based on the most recent numbers of the insured and pensioners as well as the income, the expenditure and the fluctuation reserve;
- 2. an overview of expected financial trends in the pension insurance in the next five calendar years based on the current evaluation of the medium term economic trend,
- 3. a description of the expected effects of the increase of the retirement age on the labour market, on the financial position of the pension insurance and of other public households,
- 4. a separate description of the pension trend in former East Germany until the wage- and salary situation in former East Germany converges with the wage- and salary situation in former West Germany.
- The trend for the white- and blue-collar employees’ pension insurance and for the Miner’s Pension Insurance is presented separately. The report is to be given to the legislative bodies on November, 30th each year.
(2) Once in each election period of the Bundestag (Lower House of German Parliament) the pension insurance report is supplemented by a report which outlines in particular:
- 1. the benefits paid by the other old-age security systems fully or partially funded by the public bodies as well as their funding
- 2. the income situation of recipients of old-age benefits,
- 3. the concurrence of different old-age security system’s benefits,
- 4. the extent to which the tax subsidy following paragraph 10a or section XI of the income tax law is claimed and
- 5. the degree to which, due to this measure, the supplementary old-age security is taken up.
- Statements concerning no 4 and 5 are to be submitted for the first time in the year 2005.
(3) The Federal Government has to suggest adequate measures to the legislative bodies if
- 1. the contribution rate in the white- and blue-collar employee’s pension insurance exceeds 20 per cent in the middle variant of the 15-years projections in the pension insurance report until the year 2020 or 22 per cent until the year 2030,
- 2. the ratio of the annual average disposable standard pension and the annual average net income predicted in respect of the share paid into additional old-age provision (net pension level) in the middle variant of the 15-year projections in the pension insurance report falls below 67 per cent; disposable standard pension is the normal old-age pension in the pension insurance of white- and blue-collar employees with 45 earning points reduced by the average contribution paid by pensioners to health insurance, the average contribution paid by pensioners to long-term care insurance and by the average tax paid without consideration of further income.
- The Federal Government should propose adequate measures to the legislative bodies if it becomes clear that despite its subsidising of the voluntary supplementary old-age provision take up is not sufficiently widespread.
the text of § 154 (4) is to be included
§ 155 Task of the Social Advisory Council
1 The Social Advisory Council’s main task is to submit an expert opinion stating its views on the Federal Government’s Pension Report.
2 The expert opinion is to be transmitted to the legislative bodies together with the Federal Government’s Pension Report.
§ 156 Composition of the Social Advisory Council
1 The Social Advisory Council is composed of
- 1. four representatives of the blue- and white collar employees,
- 2. four employers’ representatives,
- 3. one member representing the German Bundesbank and
- 4. three academic members from economics and social science faculties.
- The Social Advisory Council’s work comes under the auspices of the Federal Ministry of Health and Social Affairs.
2 The Social Advisory Council’s members are appointed by the Federal Government for a period of four years. One representative each for the employees and for employers are nominated from
- 1. the board of ‘The German Federation of the Pension Institutes’ for ‘The German Federation of the Pension Institutes’,
- 2. the board of ‘The German Federation of the Pension Institutes’ for the blue-collar employees’ pension insurance,
- 3. the board of ‘The Federal Insurance Fund for Salaried Employees’ for the white-collar employees’ pension insurance,
- 4. the board of ‘The Federal Insurance Fund for Miners’ the miner’s pension insurance.
3 The nominees have to satisfy the criteria for membership of a self-administered, i.e. independent body (§ 51 Social Code, Part IV). Prior to appointing the three academics the Conference of Heads of German Universities (Hochschulrektorenkonferenz) is to be consulted.