Approaches to Standardizing the Pension System in Germany

Over 20 years after German reunification major differences still exist in the calculation of statutory pensions in Eastern and Western Germany. As a result, there have long since been calls for a standardization of the pension system in Germany in the political sphere. These calls are primarily based on the presumed necessity of increasing Eastern German pensions to Western German levels; in reality, however, it is above all important to eliminate any disadvantage to contributors in Western Germany by restoring contributory and participatory equivalence. Since all of the proposals to date for individual groups of those concerned lead to less favourable treatment than the status quo, the corresponding parliamentary initiatives to date have remained unsuccessful. In this article the Ifo Institute presents its own proposal, which leaves the distributive position of Eastern German pensioners virtually untouched on the one hand, but also addresses the unfair treatment of contributors in Western and Eastern Germany.