The new Merkel government in Germany’s promise to spend more on pensions and lower the retirement age for certain workers has attracted criticism because of its cost.
- Earlier retirement has been given to some longtime workers – employees who have contributed to Germany’s social-security system for 45 years will be able to retire on a full pension at the age of 63
- Subsidies for the public pension system already take up 28% of spending in Germany’s federal budget
- Economists warn that encouraging earlier retirement for some workers would add to the burden on public finances of Germany’s fast-aging population, and will also push up payroll taxes that weigh on jobs and workers’ incomes
More detail at: German Coalition Plans More Pension Money (The Wall Street Journal is often gated, so if you’re unable to access the article try a search of Google news using the headline)