Due to record-high employment coupled with a rising level of reserves, Germany will seek to reduce €1.3 billion worth of combined pension contributions it receives from employers and employees in 2018, government sources told Reuters Friday.
According to Reuters, the 2018 contributions paid into the public pension system will slide 0.1% to 18.6% of the total wage package, leaving employers and employees roughly €1.3 billion more next year.
Once the government publishes its updated tax revenue estimates (due on November 9), the reduction can formally be agreed upon on November 22.
Due to Germany’s aging society, pension contributions were calculated to remain stable at 18.7% until 2021 before increasing 0.2% to 18.9% in 2022. Reuters also reports that experts estimate the working age population will shrink “massively” over the next 10 years, despite recent increases in the birth rate and influx of migrants.
According to a survey of Germany’s DIHK Chambers of Industry and Commerce released Thursday, companies view rising labor costs as one of the key risks for future growth.