Direct Request (CEACR) - adopted 2017, published 107th ILC session (2018)

Observation (CEACR) - adopted 2013, published 103rd ILC session (2014)

Replies received to the issues raised in a direct request which do not give rise to further comments (CEACR) - adopted 2011, published 101st ILC session (2012)

Direct Request (CEACR) - adopted 2006, published 96th ILC session (2007)

The Committee notes the detailed statistics and explanations provided by the Government with regard to the methods of calculation and adjustment of the old‑age, invalidity and survivors’ pensions, which have been the subject of the Committee’s dialogue with the Government for a certain number of years.

Part II (Invalidity benefit) and Part VI (Survivors’ benefit) of the Convention. In its previous comments, the Committee asked the Government to show, by means of concrete examples, the impact on the calculation of the invalidity and survivors’ benefits of an intermittent career containing both missing and credited periods and to provide calculations of their replacement rate 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. The Committee would once again ask the Government to provide this information, including 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). In its previous conclusions, the Committee requested the Government to provide updated calculation of old-age pension to show that it reaches the replacement rate of 45 per cent prescribed by the Protocol for a man having 30 years of contributions or employment, a wife of pensionable age and no dependent children. The Government indicated that calculations made on this basis resulted in a replacement rate of 42.8 per cent of the reference salary in the old Länder and 42 per cent in the new Länder, whereas calculations based on 35 years of contributions gave the replacement rates of 49.9 per cent in the old Länder and 49 per cent in the new Länder. According to the Government, it would be extremely unrealistic to base the calculation of the pension’s replacement rate on an employment period of 30 years, since under the German pension law many additional periods were included in the insurance career of the person concerned and credited for pension purposes. In 2004, 79.9 per cent of the first-time male pension recipients had an insurance career of over 35 years. According to the detailed information provided by the Government, such additional periods comprise three main types of periods: (1) periods for which contributions for the person concerned are paid by the State or the insurance agency (e.g. periods of training, military or civilian service, child rearing, care provision, receipt of wage replacement benefits such as sickness, injury, unemployment benefits, etc.); (2) added periods for which no contribution is paid but which are nevertheless valuated and increase the pension (e.g. professional schooling, maternity protection), as well as “zero” added periods which do not increase pensions directly (e.g. unemployment); (3) credited periods (Berücksichtigunszeiten) which serve to close gaps in the insurance career caused by rearing children up to the age of 10. The Committee understands, from the explanations given in the report, that in the German pension system a standard beneficiary having completed the qualifying period of 30 years of employment referred to in Article 18(1)(a) of the Convention, would have in fact a longer insurance career extended by additional periods credited to him for military service, schooling, unemployment, etc., which would give an added value to his pension. The Committee further notes that, according to the statistics provided in the Government’s 35th report on the application of the European Code of Social Security (2005-06), in order to obtain an old-age pension at the level of 45 per cent of his previous earnings guaranteed by the Convention, the standard beneficiary should have an employment record of 32 years. It would therefore ask the Government to indicate in its next report what additional periods could normally be included in the insurance career of the standard beneficiary with the effect of increasing his pension by the same amount which would bring two additional years of regular employment. Please provide statistics on the percentage of the first-time male pension recipients with an insurance career of over 32 years.

The Committee also notes that the Act on need-oriented basic protection in old age and in the case of reduced earning capacity (Gesetz über eine bedarfsorientierte Grundsicherung im Alter und bei Erwerbsminderung – GsiG), which came into force on 1 January 2003 and was subsequently integrated in the SGBXII, was meant to combat poverty in old age. The basic need for livelihood is to be guaranteed for persons over 65 years of age who have withdrawn from working life for good and whose income is not sufficient to maintain their livelihood. It is not necessary to actually draw an old-age pension. Since October 2003, all pensioners are provided with targeted information regarding benefit entitlements under this Act by their pension insurance fund if their respective incomes do not exceed the monthly amount of 844 euros. The Committee would like the Government to indicate to what extend the dependent wife of pensionable age of the standard beneficiary could benefit from the basic protection in old age under this Act or under social assistance provisions, taking into account that the net monthly income of the couple will amount to 889.25 euros.

Part V (Standards to be complied with by periodical payments), Article 29. In its previous direct request, the Committee asked the Government to explain the practical effect of the new pension adjustment rules established by 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 and 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. In reply, the Government indicates that the sustainability factor (Nachhaltigkeitsfaktor) was first calculated for the period from 1 July 2005 onwards at the rate of 0.9939, which mathematically would have meant a reduction of the current pension value by 0.61 per cent. The application of the so-called Riesterfaktor reflecting changes in the proportion of old-age provision would have led to a further reduction of the current pension value by 0.62 per cent. These reductions however were not implemented due to a legal safeguard clause precluding combined application of both factors resulting in a reduction of current pension value, which was therefore left unchanged. According to the report, such “moderation of pension adjustments necessary to stabilize the system” were to be implemented at a later stage after 2010.

The Committee understands that, be it not for the safeguard clause, under the present circumstances the new pension adjustment factors operate in such a way as to reduce the current pension value and that such “moderation” necessary to stabilize the system will be used to offset possible increases in the pension rate after 2010. It also notes that the rate of pension adjustments in 2004 and 2005 was zero and that over the five-year period (2000-05) growth in pensions (1.08) lagged behind the increase in consumer prices (1.61). In order to better assess the long-term effects of the new pension adjustment rules, the Committee would like the Government to explain, on the basis of existing actuarial studies, what stabilization results are expected to be achieved in the German pension system by moderating adjustment of pensions in the foreseeable future. Please continue to supply detailed statistics on the changes in pensions in comparison with the general level of earnings and the cost of living required by the report form under Article 29 of the Convention.

Finally, taking into account the highly complex technical nature of the questions involved and the high sensitivity of the results to the choice of the methodology used for calculating the level of benefits, as well as the need to coordinate the country’s obligations under ILO and European social security standards, the Committee wishes to draw the Government’s attention to the suggestion of seeking clarification of these issues through technical cooperation that it makes in the conclusions concerning the 35th report on the application by Germany of the European Code of Social Security.

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.

Direct Request (CEACR) - adopted 1996, published 85th ILC session (1997)

Part V (Standards to be complied with by periodical payments), Article 26 of the Convention. In its previous comments, the Committee decided to postpone its examination of some of the statistical information provided by the Government concerning the level of long-term benefits, following the pension reform in force in 1992. The statistics supplied covered the year 1993. In its last report, which also refers to the statistics supplied under Convention No. 102, the Government provides new and very detailed information on the method of calculating old-age, invalidity and survivors' benefits, together with the relevant statistics, covering the year 1995. The Government established the above statistics on the basis of both gross amounts and amounts after deduction of taxes and social security contributions.

The Committee notes this information with interest. It has also taken account of the statistics supplied by the Government in its 25th Report on the application of the European Code of Social Security and its Protocol. It notes that, if one takes account of the amount of gross periodical payments, before deduction of taxes and social security contributions, as compared to gross earnings, the level prescribed by the Convention cannot be considered as having been reached for the three contingencies mentioned above. In these circumstances and in view of developments in international social security law in particular, the Committee considers it advisable to refer in the comments below only to the statistics provided by the Government which are based on amounts after deduction of taxes and social security contributions.

1. Part II (Invalidity benefit), Articles 10 and 11, and Part IV (Survivors' benefit), Articles 23 and 24. The Committee notes that the statistical information supplied by the Government on the level of invalidity and survivors' benefits takes account, in determining remuneration points (one of the four decisive factors in calculating the benefit) not only of periods of contribution, but also additional periods, i.e. periods between the onset of the contingency and the date corresponding to the 60th birthday of the insured person (section 59 of the SGB VI). Accordingly, in its last reports on the European Social Security Code and Convention No. 102, the Government bases its calculations of the levels of invalidity and survivors' benefits on the assumption that a minimum of 35 years of insurance would be credited. The Government has already had recourse, in its previous reports, to additional periods in order to meet the level of invalidity and survivors' benefits prescribed by the Convention, in accordance with paragraph 5 of Articles 11 and 24. However, the Committee understands that the situation has been changed by the pension reform which came into effect in 1992, to the extent that additional periods are no longer automatically credited in their entirety to all insured persons, but now depend on periods of affiliation to the insurance and, in particular, on "missing periods" (Lücken). Under the new legislation, non-contributory periods are no longer credited with the average value of contributions actually paid, since the so-called overall validation method, which is based on contributions, implies that non-contributory periods are credited with a lower value when there are gaps in affiliation to the insurance (see sections 71 to 75 of SGB VI).

The Committee is fully aware of the advantages that counting additional periods otherwise presents for insured persons - and their families - when invalidity or death occurs at a relatively young age. However, so that the Committee can better ascertain how the provisions of the Convention are applied in practice, it asks the Government to indicate in its next report the number of beneficiaries of invalidity and survivors' benefits for whom the level of the benefit is lower than that prescribed by the Convention because there are gaps in the period of their insurance contributions. In this context, the Committee also notes that, according to the Government's statement in its report on the application of the European Code of Social Security, in respect of benefits for reduction of earning capacity paid for the first time to male beneficiaries in the manual workers' invalidity-old-age insurance scheme, the relevant periods that counted towards the pension and were validated in 1994 on average to 39.8 years in the old Länder and 40.4 years in the new Länder. It asks the Government to confirm that these statistics take account of any gaps noted in the career of the insured persons. It also hopes that the Government will be able to provide the same information in respect of the salaried employees' invalidity-old-age insurance scheme as well as insured persons who are women.

The Committee further notes, from the statistics provided by the Government in its report on the application of Convention No. 102 and the European Code of Social Security that, in the new Länder, the level of invalidity benefits (after deduction of taxes and social security contributions), for a standard beneficiary attained, in 1995, 47.2 per cent of the previous earnings (net) for a qualifying period, including the additional period, of 35 years (due account being taken of the family allowances paid during employment and during the contingency). The Committee hopes that in its future reports the Government will be able to indicate the progress made in gradually bringing the level of invalidity benefits in the new Länder up to that prescribed by the Convention (50 per cent of the reference wage).

2. Part III (Old-age benefit), Articles 17 and 18. The Committee notes from the information supplied by the Government in its reports on Convention No. 102 and on the European Code of Social Security that the level of the old-age benefits (net) paid to a standard beneficiary (with a wife of pensionable age) who, in accordance with Article 29 (paragraph 1(a)) of the Convention, has completed a qualifying period of 30 years' contributions, attained 46 per cent of the reference wage (net) in 1995 in the old Länder. In the new Länder, however, the rate is only 42.4 per cent whereas the level prescribed by the Convention is 45 per cent. In these circumstances, the Committee hopes that in its future reports the Government will continue to provide information on progress made in gradually raising the level of old-age benefits in the new Länder to the percentage prescribed by the Convention.

3. The Committee notes the information supplied by the Government in the addendum to the report on Convention No. 102, concerning, inter alia, the number of workers protected in the old Länder. It hopes that the Government's future reports will provide the same information for the new Länder.

Direct Request (CEACR) - adopted 1995, published 83rd ILC session (1996)

With reference to its previous comments, the Committee notes with interest the statistical data supplied by the Government in its report covering, among other matters, the level of invalidity, old-age and survivors' benefit, both in the old and the new Länder. In view of the complexity of the question, the Committee has decided to defer examination of it until its next session so that it can take into account the most recent information supplied by the Government in the context of the European Code of Social Security.

Direct Request (CEACR) - adopted 1994, published 81st ILC session (1994)

1. Part V (Standards to be complied with by periodic payments), Article 26 of the Convention, in relation with Part II (Invalidity benefit), Articles 10 and 11, Part III (Old-age benefit), Articles 17 and 18, and Part IV (Survivors' benefit), Articles 23 and 24. The Committee notes with interest the very detailed statistics supplied by the Government in its report concerning, among other matters, the level of invalidity, old-age and survivors' benefit in both the old and the new Länder. It notes, however, that the Government is continuing to base its calculations on the "individual basis for the calculation of pensions" which formed part of the formula used for the calculation of benefits before the 1992 reform. In order to be in a position to assess fully the manner in which effect is given to the above provisions of the Convention, the Committee would be grateful if the Government would supply with its next report statistics on the level of invalidity, old-age and survivors' benefit in the manner called for in the report form under Titles I to IV of Article 26, comparing the level of benefit (with the addition of the family allowances provided during the contingency) provided to a standard beneficiary with the wage of a skilled manual male employee determined in accordance with paragraph 6 or paragraph 7 of Article 26 (with the addition of the family allowances provided during employment). The Government is asked to base its calculations on (a) levels which are net of taxation and social contributions and (b) gross levels.

2. With regard more particularly to invalidity and survivors' benefit, the Committee notes the information supplied by the Government concerning the substitute periods, within the meaning set out in section 59 of the Sixth Book of the Social Code, and the statistics on the level of invalidity and survivors' benefit in the cases in which the beneficiary or the family breadwinner began to contribute at the age of: (a) 25 years; and (b) 30 years, and when the contingency occurred five years after the commencement of the insurance. The Committee would be grateful if the Government would base its calculations for the above two hypotheses on the net and gross wages of a skilled manual male employee, and not on the "individual basis for the calculation of pensions". It would also be grateful if the Government would supply detailed information on the manner in which the above calculations are computed.

[The Government is asked to report in detail for the period ending 30 June 1994.]

Direct Request (CEACR) - adopted 1993, published 80th ILC session (1993)

Part II (Invalidity benefit); Part III (Old-age benefit); Part IV (Survivors' benefit). The Committee notes with interest the very detailed information supplied by the Government in its report and in its report on the application of Convention No. 102. It hopes that the Government's next report will also contain statistical information concerning the new Länder.

Furthermore, in view of the period covered by the report, the Government supplied statistical information on the level of benefits relating to the year 1991 and this information therefore precedes the coming into force on 1 January 1992 of the Act to reform the pension scheme. In order to be fully able to assess the implementation of this reform in relation to the obligations deriving from the Convention, the Committee requests the Government to supply with its next report the statistical information required under the report form for the period 1992.

The Committee would also be grateful to receive details on the following point:

Part V (Standards to be complied with by periodic payments), Article 26, of the Convention (in relation with Part II (Invalidity benefit), Articles 10 and 11, paragraph 5, as well as with Part IV (Survivors' benefit), Articles 23 and 24, paragraph 5). In compiling statistics concerning the level of invalidity and survivors' benefit, the Government states that, taking into account the provisions respecting the supplementary period, 35 years of insurance are generally validated, thereby ensuring the payment of an invalidity pension equivalent to 55.2 per cent of the individual calculatory base and the provision of a survivors' pension equivalent to 49.4 per cent of the above base.

The Committee understands that the Government intends to have recourse to the provisions of Article 11, paragraph 5, and Article 24, paragraph 5. It would therefore be grateful if the Government would supply additional information on the manner in which the substitute periods, within the meaning set out in section 59 of the Sixth Book of the Social Code, are taken into account for the calculation of invalidity and survivors' benefit, particularly when the beneficiary has not contributed for the whole of the period preceding the contingency. It requests it in particular to supply statistics on the level of invalidity and survivors' benefit in the cases in which the beneficiary or the family breadwinner began to contribute at the age of: (a) 25 years; and (b) 30 years, and when the contingency occurred five years after the commencement of the insurance (or, in case (a) at the age of 30 years, and in case (b) at the age of 35 years) and to compare the above benefit with the net and gross wage of a skilled manual male employee.

[The Government is asked to report in detail for the period ending 30 June 1993.]

Direct Request (CEACR) - adopted 1991, published 78th ILC session (1991)

1. With reference to its previous comments, the Committee notes the information supplied by the Government in its report, particularly concerning Part V (standards to be complied with by periodical payments), in relation to Parts II (Articles 10 and 11), III (Articles 17 and 18) and IV (Articles 23 and 24).

2. The Committee notes the adoption on 18 December 1989 of the Act to reform pensions, the principal provisions of which are to come into force on 1 January 1992. The principal aim of this Act is to deal with the consequences of developments in the demographic structure of the population through a common burden-sharing effort by retirees, contributors and the Federal State. The Committee hopes that, when this reform is implemented, the measures that are adopted will continue to take account of the level of protection prescribed by the Convention. It would be grateful if the Government would supply detailed information, in accordance with the report form adopted by the Governing Body, on the implementation of this legislation in relation to the various Articles of the Convention and, in particular, if it would supply the necessary statistics to determine whether the level of old-age, invalidity and survivors' benefit attains the level required by the Convention. The Committee reserves the right to make a more detailed examination of the Act to reform the pensions scheme when it has at its disposal a translation of the text in English or French.

Direct Request (CEACR) - adopted 1990, published 77th ILC session (1990)

1. The Committee takes note of the information supplied by the Government in its report, particularly with regard to the implementation of the law of 11 July 1985 on the reorganisation of survivors' pensions and the recognition of the periods for children's education in the pension insurance scheme, in respect of Part IV of the Convention.

2. With regard to Part V (Standards to be complied with by periodical payments), in relation to Parts II (Articles 10 and 11), III (Articles 17 and 18) and IV (Articles 23 and 24), the Committee notes the statistical information supplied by the Government concerning the level of benefits, in reply to its previous comments. These statistics show that the amount of the invalidity, old-age and survivors' benefits paid to a standard beneficiary would correspond to the level prescribed by the Convention if the personal basis of assessment for pension purposes - which, according to the report, was 32,376 marks for a skilled worker in 1988 - is considered to be "previous earnings" as laid down in Article 26 of the Convention, and taking into account, for the calculation of invalidity and survivors' benefits, the flexibility clauses provided by Article 11, paragraph 5, and Article 24, paragraph 5, of the Convention.

The Committee also takes note of a report on pension adjustments in 1988 from the federal Government to the Council of States, which contains a table (page 77 of the report) concerning developments between 1957 and 1988 in certain factors, including, in particular, the average gross earnings of insured persons, the general basis of assessment for pension purposes and the rate of pensions. It has noted, in particular, that according to the statistics shown in this table, the gross amount of pensions after 45 years of insurance represents 51 per cent of the gross amount of earnings (1988 estimate). It infers from these statistics that an old-age pension, calculated on the basis of a period of 30 years of insurance, in conformity with Article 18, paragraph 1(a), of the Convention, would be equal to 34 per cent of these earnings, whereas, according to the table in the Appendix to Part V of the Convention, the old-age pension for a standard beneficiary should be 45 per cent. In the Committee's opinion, this difference might be due, inter alia, to the fact that over the years the average gross earnings increased by a higher proportion than the general basis of assessment for pension purposes. The Committee would be grateful if the Government would supply with its next report all information liable to contribute to a better appreciation of the situation, in the light of the above-mentioned provisions of the Convention.

3. The Committee takes note of the information supplied by the Government on the application of Article 15, paragraph 3, of the Convention (which provides that retirement age shall be lowered to less than 65 years for persons who have been engaged in arduous or unhealthy work) and, in particular, the coming into effect on 1 January 1989 of the Act on part-time employment for older workers. The Committee hopes that the Government will continue in its future reports to provide information on all progress made in giving fuller effect to Article 15, paragraph 3, referred to above, due regard having been had to the amount of the benefits and the qualifying periods prescribed by Articles 17 and 18.

4. Finally, the Committee takes note of the information supplied by the Government in its eighteenth report on the application of the European Social Security Code as amended by its Protocol, concerning the pension insurance reform which has been submitted to Parliament for examination and adoption. The Committee hopes that any measures adopted following this reform will continue to take account of the level prescribed by the Convention. It would be grateful if the Government in its next report would communicate detailed information on the results of this reform. [The Government is asked to report in detail for the period ending 30 June 1990.]