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Raising the retirement age and gross returns on pension contributions

Current Project

Project Management

Johannes Geyer

Project Period

March 1 - October 31, 2021

Commissioned by

Deutscher Gewerkschaftsbund

The aim of the project is to calculate the effects of a further (continuous) increase in the standard retirement age on the gross returns on pension insurance contributions of different cohorts. The project is divided into three modules. In the first module, the mechanisms are presented that take effect in the pay-as-you-go German pension system when the retirement age is raised for certain groups. For this we use a simplified stylized model that allows studying individual factors and their effects. In the second module, we use the aggregated simulation model PenPro, which can map the effects of raising the retirement age on the contribution rate, pension adjustment and federal subsidy under realistic assumptions. The model is designed as a cohort model and is therefore ideally suited for this analysis. The aim of this module is to examine which groups / cohorts benefit from an increase in age limits under which conditions (assumptions about the labor market) or suffer financial disadvantages (employees, employers, state). In the third module, the study places the findings in the further political and scientific discussion about raising the retirement age.

DIW Team