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| Europe |
| Germans invest in private pensions |
| 2005-08-18 |
| Germans are investing in private funds to secure their pensions more than ever, the German daily Frankfurter Allgemeine Zeitung reported Wednesday. Private retirement packages in 2005 rose significantly higher compared to a year ago, Germany's Social Affairs Minister Ulla Schmidt said Tuesday in Berlin. "Everyone in Germany knows: State pensions won't suffice anymore. One needs private arrangements," she said. Roughly 4.5 million Germans have so far invested in the Riester-pension, a state-endorsed independent retirement fund named after a former federal minister. "2005 is the year of the Rieste-pension," Schmidt said. Germany's federal pension system has come under great pressure in recent years, as less money entered the federal pension fund because of dwindling employment numbers. Employers and employees both pay contributions to the fund. The Riester-pension was designed to support lower-wage earners and families with their private retirement arrangements. Since 2002, insurance companies have brokered seven million new pension funds, the newspaper said. Ironically, these private pensions were created for the same original reason that social security was created in the US, to garnish the wages of lower-wage earners to support lower-wage earners' retirements. Had congress left it as such, it would have been a fine retirement plan for just these people. But they couldn't resist trying to make it universal--which killed it. |
| Posted by:Anonymoose |
| #2 That's one thing I can't stand the site off. A country that is full of "closet capitalists." Yes, I know that Ger. is a DB, I love IRA but the problem is that the IRA has too many restrictions to qualify. You have to be at a certain income level and you can't dump as much as you want, into the IRA money bag. Congress needs to get rid of the restrictions on IRA. |
| Posted by: Poison Reverse 2005-08-18 18:31 |
| #1 Are these like IRA's or deferred compensation plans that we have here in the US? (As in may or may not be tax deductible, money grows tax free, age limit to when you can withdraw the $?) Or is it organized differently? I work for a pension fund and even though we tell participants from the start that they need to have additional savings, most of them ignore us. (Or they try to pull the money out to pay power bills, moving expenses, or even rent.) |
| Posted by: Desert Blondie 2005-08-18 10:32 |