Bundestag votes to restart pension scheme

Germany’s parliament has voted to replace the underperforming “Rister” pension system with a new state-backed savings model.

The current system, introduced in 2002, has proven unpopular because it yields low returns, is complex and expensive and offers limited benefits – especially for low-income people. The reform aims to fix this by making savings simpler, cheaper and potentially more profitable.

Finance Minister Lars Klingbeil called the reform a “real milestone” and a “game changer”, saying it strengthens the third pillar of pensions alongside statutory and business schemes.

The changes agreed in Parliament make private retirement savings more attractive for low-income people and families, he said, adding that savings will now pay off “from the first euro” and costs have gone down.

The SPD-CDU/CSU coalition approved the reform, which would effectively abolish new restorative contracts. The Left Party voted against while the Greens and the far-right AfD abstained.

Eligibility will be expanded to include self-employed workers, while state subsidies will be simplified and increased, especially for families.

Klingbeil also said his ministry would soon introduce a “starter pension” scheme, under which the state would contribute about €10 (about $11.50) per month to the retirement accounts of children and youth.

Germany’s centre-left Social Democrats (SPD) have called a special leadership meeting after recent election defeats in Baden-Wurttemberg, Rhineland-Palatinate and Munich.

The expanded Presidium met at the party headquarters in Berlin with ministers, state prime ministers, senior parliamentary figures and leading candidates in attendance.

Party leaders Barbel Baas, Lars Klingbeil and general secretary Tim Klusendorf are set to address the press after the meeting.

The loss has plunged the SPD into deep crisis, but the leadership has refused to step down and is instead pushing for a clear reform course within a coalition with the conservative CDU/CSU.

The SPD suffered two crushing defeats in the Rhineland-Palatinate state election and the Munich mayoral election on Sunday. Those defeats were followed two weeks ago by another serious one in the south-western state of Baden-Württemberg.

Three more state elections are planned across Germany this year, which could further increase pressure on the party leadership.

good day From the DW newsroom in Bonn.

Join us as the Bundestag, Germany’s lower house of parliament, votes on reforms to the country’s state-supported private pension system.

The current model is widely considered disappointing, with relatively little reward – especially for those on low incomes.

Meanwhile, the centre-left Social Democrats, part of the country’s ruling coalition, are conducting a post-mortem after a series of election defeats.

Stay tuned for these and other stories from Germany.