Germany’s statutory pension is currently financed on a pay-as-you-go basis: contributions from those in work are paid out directly to pensioners. A capital-funded pension, by contrast, would mean that part of the contributions is invested and the returns later supplement pensions.
Hartmut Walz, a financial and consumer protection expert, considers this step long overdue. The capital-funded pension is “unequivocally welcome,” he said.
Source: www.deutschlandfunk.de
