Observation (CEACR) - adopted 2013, published 103rd ILC session (2014)

Invalidity, Old-Age and Survivors' Benefits Convention, 1967 (No. 128) - Germany (Ratification: 1971)

The Committee notes that, on 5 September 2013, the German Confederation of Trade Unions (DGB) communicated comments on the application of the Convention. In these comments, the DGB recalls that, according to calculations provided in the Government’s report regarding old-age benefit for the period 2010–11, an employed person earning 125 per cent of the net average income of all persons protected would receive a net old-age pension corresponding to 69.1 per cent of previous earnings in the old federal Länder and 68.6 per cent in the new federal Länder, whereas the replacement rate required by the Convention is set at 45 per cent. The DGB considers that this assumption should be examined critically since, in order to reach this replacement rate after a period of 30 years of contribution or employment, the Government has taken into consideration two sets of additional components which have the effect of increasing the basic pension of the standard beneficiary: (i) certain periods for which no contributions were due, such as 15 months of military service, three years of training and two years of technical college, have been added as they have the effect of increasing the contribution period and, consequently, the basic old-age pension from 41.49 to over 49 per cent of the reference wage. Without these elements, the basic pension granted to a person earning 125 per cent of the average wage of all persons protected, after 30 years of contribution, would amount to around 42 per cent of previous earnings, which is below the threshold of 45 per cent required by the Convention; (ii) the amount of a supposed additional private old-age pension has also been added to the basic old-age pension which has the effect of raising the net replacement rate to approximately 69 per cent of the reference wage. However, some 30 per cent of the total number of workers are not covered either by a supplementary occupational pension scheme or a “Riester” pension scheme and this percentage increases to 42 per cent in the low-income brackets, while the Convention requires pension coverage of all employees. The DGB therefore estimates that, particularly for the low-income groups, the actual level of old-age protection in Germany is considerably less than assumed by the federal Government and stresses that, as party to the Convention representing the minimum standard for well-developed countries, Germany should fulfil the obligation to provide benefits beyond the level needed merely to avoid poverty in old age and seek to ensure income replacement closer to previous earnings so that better social benefits can be guaranteed by growing prosperity. The Committee requests the Government to provide its reply to the above observations in time to allow examination of the situation at its next session in November–December 2014.