Personal assets and pension reform: How well prepared are the Germans?
AbstractDemographic change presents major financing problems for the pay-as-you-go pension system. In response to these problems, the 2001 and 2004 German pension reforms reduced the statutory level of benefits from the pay-as-you system. The resulting pension gap is supposed to be filled by funded second and third pillar private pensions. This paper examines the extent to which households are in a position today to close this gap with their personal assets, assuming that they stick to their current saving and asset accumulation behaviour. Four critical factors are relevant to this issue: 1. the anticipated life expectancy, 2. the level of personal assets on retirement 3. the expected age of retirement, and 4. the anticipated interest rate. Our results indicate that about a third of German households will not be able to fill the pension gap unless they were to change their current savings behaviour.
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Bibliographic InfoPaper provided by Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim in its series Sonderforschungsbereich 504 Publications with number 05-19.
Length: 47 pages
Date of creation: 17 Mar 2005
Date of revision:
Note: Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.
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- Hans-Martin von Gaudecker, 2004. "Regionale Mortalitätsunterschiede in Baden-Württemberg," MEA discussion paper series 04046, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
- Dummann, Kathrin, 2008. "Retirement saving and attitude towards financial intermediaries: Evidence for Germany," Thuenen-Series of Applied Economic Theory 99, University of Rostock, Institute of Economics.
- Bucher-Koenen, Tabea & Kluth, Sebastian, 2013. "Subjective Life Expectancy and Private Pensions," MEA discussion paper series 12265, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
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