German Pension Reform

Abstract

The German pension system was the first formal pension system in the world, designed by Bismarck nearly 120 years ago. It has been very successful in providing a high and reliable level of retirement income in the past at reason- able contribution rates, becoming a model for many social security systems worldwide. While the generosity of the German public pension system is con- sidered a great social achievement, negative incentive effects of past reforms in the 1970s and 1980s and population aging are threatening the very core of the pension system. These have led to fundamental pension reforms since 1992. This thesis delivers an assessment of the German pension system and its reforms.