"Tough Talk on Pensions" Economist Veronika Grimm demands linking pensions to inflation
Inflation-tied pension adjustments to foster economic expansion
Chatting casually with Deutschlandfunk, economist Veronica Grimm spilled some bold plans to shore up Germany's pension system for the long haul. The new federal government's avoidance of concrete solutions for the pension crisis irked Grimm, who sees quick fixes in the coalition agreement as insufficient.
Grimm suggests a series of "uncomfortable" measures to create a solid foundation for retirees. These steps include adjusting the retirement age according to increasing life expectancy, gradually, about a year every ten years. While the current legal retirement age sits at 67, this change would maintain a balanced ratio of retirees to employed citizens.
Healthy individuals who cannot work beyond the normal retirement age could also lose early retirement benefits, under Grimm's proposal. Additionally, existing pensions should rise in sync with price levels rather than wages, to provide retirees with a lasting purchasing power.
Grimm isn't impressed with Federal Minister of Labor and Social Affairs Barbara Bas's proposal to bolster pension revenues by integrating civil servants into the statutory pension scheme. Grimm calls it just a band-aid solution unless civil servant claims are reduced simultaneously.
Instead, Grimm proposes debating which professional groups should maintain their status as civil servants. She would exclude those closely tied to loyalty to the state, such as police officers and justice employees.
While the search results do not provide specifics on Grimm's stance on linking pensions to inflation, economists generally advocate for such a connection to preserve retirees' purchasing power, maintain economic stability, promote social justice, and spur economic activity.
Sources: ntv.de, chl/dpa
- Pension
- Pension policy
- Inflation
- Economic Stability
- Social Justice
- Economic Activity
The economist, Veronica Grimm, proposes linking pensions to inflation as a means to preserve retirees' purchasing power and maintain economic stability, aligning with the general views of economists on this matter. In addition, Grimm suggests several measures for pension policy reform, including adjusting the retirement age, reviewing the status of civil servants, and tying pension increases to inflation rather than wages.
