Direct Request (CEACR) - adopted 2005, published 95th ILC session (2006)

Part II. Invalidity benefit of the Convention. In its report on the Code, the Government provided calculation of the invalidity pension on the basis of the period between age 17 (commencement of employment) and age 34 (onset of invalidity) including a period of one year during which the employee received unemployment benefit I (ALG I) or unemployment benefit II (ALG II). The Committee notes that in both cases the resulting replacement rate of the invalidity pension satisfies the 50 per cent required by the Convention. The Committee would appreciate it if the Government’s next report would include calculations of the replacement rate of an invalidity pension for a standard beneficiary whose career after the age of 17 included periods of education, self-employment or unemployment until age 30 when he started uninterrupted salaried employment for 15 years and became invalid at age 45. Please also include examples of calculations for the same beneficiary who, before having a stable employment career at the age of 30, spent maximum allowed periods on unemployment benefits I and/or II.

Part III. Old-age benefit. (a) In its thirty-fourth annual report on the European Code of social security, the Government indicated that calculations of old-age pension for a standard beneficiary with 30 years of contributions resulted in a replacement rate of 43 per cent of the reference salary in the old Länder and 42.3 per cent in the new Länder, whereas calculations based on 35 years of contributions gave the replacement rates of 50.1 per cent in the old Länder and 49.3 per cent in the new Länder. According to the Government, it would be unrealistic to base the calculation on a contributory period of 30 years since, under the German pension law, periods of unemployment or training, etc., were credited for pension purposes. In support of this view, the Government referred to a study on pensions newly awarded in 2002, which showed that about 70 per cent of all new male pensioners had more than 40 years of contributory period. In this respect, the Committee would like the Government to provide in its next report detailed information on which additional periods were credited for pension purposes, including invalidity and survivors’ pensions, and how they were valued.

(b) The abovementioned report on the Code indicated that the Act to Secure the Sustainable Financial Basis of the Statutory Pension Insurance (Pension Insurance Stability Act) (Gesetz zur Sicherung der gestzlichen Rentenversicherung - RV-Nachhaltigkeitsgesetz), which entered into force on 1 January 2005, modified the formula for the adjustment of pensions by introducing a sustainability factor, through which the correlation between persons receiving benefits and persons in compulsorily insured employment is taken into account when pension adjustments are made. The adjustment of pensions was also aligned with changes of the sum of gross wages and salaries that are liable to compulsory contributions. The Committee would like the Government to explain the practical effect of the new pension adjustment rules on the application of Article 29 of the Convention and to provide all relevant statistics.

Part IV. Survivor’s benefit. The Committee notes that, as for the invalidity pension, the calculation of the replacement rate of the survivors’ pension given in the report on the Code is based on a contributory period of the breadwinner of 43 years, which comprises a period of uninterrupted employment of 15 years and an additional credited fictitious period of 28 years. The Committee would appreciate it if the Government’s next report on the Convention would provide calculations of the replacement rate of the survivors’ benefit for a standard beneficiary whose career after the age of 17 included periods of education, self-employment or unemployment until age 30 when he started uninterrupted salaried employment for 15 years and died at age 45. Please also include examples of calculations for the same beneficiary who, before having a stable employment career at the age of 30, spent maximum allowed periods on unemployment benefits I and/or II. As regards means-testing of the survivors’ benefit under the new legislation, which takes into account income from property and investment, the Committee notes that most of the newly awarded survivors’ pensions were still governed by the old legislation, which takes into account only work-related income.