Dissertation_Paula Aleksandrowicz_12 ... - Jacobs University

3.2.1. Overview of Changes in Pension Laws 12
The old-age pension, next to the unemployment benefit provided for a longer period to
older unemployed (see section 3.2.2.) and diverse forms of the public-private mix in
retirement transitions are the main institutions which exert an impact on the externalisation
strategies of firms and on the (early) exit decisions of individuals. The next sections will
depict in detail the changes that the old-age pension and disability insurance have undergone
in Germany.
The multiple subdivisions of the German old-age pension scheme have arisen from the
incremental expansion of schemes covering various groups of employees and self-employed
(BmAS 2005: 38-83). The core of the system is the obligatory pension scheme for gainfully
employed persons (Deutsche Rentenversicherung Bund) and for miners (Knappschaftliche
Rentenversicherung). The development of the German pension system is characterised by an
expansion of early retirement pensions in the seventies and eighties, and with a subsequent
curtailment of those options in the nineties and the current decade (Table 2).
The year 1972 witnessed the introduction of the ´flexible retirement age´ by the coalition
of SPD and FDP and marks the starting date of the trend towards early exit in Germany. The
flexible retirement age allowed the receipt of the old-age pension at the age of 63 after 35
years of contribution record, and in case of a severe handicap at the age of 62 (later lowered
to the 60 th year). The seniority pension was addressed to persons who were worn-out but not
completely disabled. Eligible persons have begun utilising those new options in great
numbers shortly after introduction (Hoffmann 2007: 299; Ruland 2004: 8), also owing to the
initially missing pension deductions. The provision was originally intended to encourage a
gradual transition to retirement. But, from the mid-seventies on, unemployment figures have
risen to unprecedented levels and the “flexible retirement age provisions... “mutate[d]” into
a buffer for labour market policy in the form of a general reduction in retirement ages”
(Naschold et al. 1994b: 163).
12 This section draws on Aleksandrowicz/Hinrichs 2004. As a source of information on specific reforms,
Steffen (2008a, 2008b) was consulted.
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