Parliament approves pension cuts

11th March 2004, Comments 0 comments

11 March 2004, BERLIN - Germany's parliament Thursday approved a pension reform which will cut state pensions in the coming years despite unease among some members of Chancellor Gerhard Schroeder Social Democratic Party. The bill, which easily passed in the Bundestag, is likely to be rejected by parliament's upper chamber, the Bundesrat, where the opposition conservatives dominate. But Schroeder's lower house majority can override the veto and the legislation will likely to get a final green light by May.

11 March 2004

BERLIN - Germany's parliament Thursday approved a pension reform which will cut state pensions in the coming years despite unease among some members of Chancellor Gerhard Schroeder Social Democratic Party.

The bill, which easily passed in the Bundestag, is likely to be rejected by parliament's upper chamber, the Bundesrat, where the opposition conservatives dominate.

But Schroeder's lower house majority can override the veto and the legislation will likely to get a final green light by May.

The reform aims to keep German state pensions from falling below 46 percent of the average national wage through 2030. At present pensioners get about 53 percent.

A typical German state pension is currently about EUR 1,000 euros per month for those who earned an average wage and paid contributions for a full 45 years.

The planned slow decline in benefits is aimed at keeping pension contributions from rising above 22 percent of average wages and salaries.

But many experts warn that keeping contributions at 22 percent will never allow state pensions to stay as high as the government promises.

Schroeder's Greens coalition partner, which backed the reform, has argued that Germany's present legal retirement age of 65 will have to be raised to 67 in order to guarantee long-term benefits these levels and costs.

DPA
Subject: German news 

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