Dissertation_Paula Aleksandrowicz_12 ... - Jacobs University

pathway, the flexible and partial pension pathway, the special pre-retirement pathway, the
unemployment pathway, and the disability pathway.
The standard old-age pension is available at the retirement age of 65 years and after a
minimum contribution period of five years. Persons who have been insured for 35 years can
claim the seniority pension (´flexible retirement age´) which is available at the age of 63,
albeit with permanent deductions of 0.3 per cent for every month of earlier take-up. 15
Women born before 1952 are entitled to the old-age pension for women available at the age
of 60 after a contribution period of 15 years (with permanent deductions). This pension was
introduced in 1957 in order to allow couples to retire together (Jacobs et al. 1991: 190). The
raising of the pensionable age set into practice with the pension reform of 1992 was a
response to European Court of Justice rulings on equal treatment in public and private
pensions (Ebbinghaus 2002: 248). Persons who are severely handicapped can apply for the
old-age pension at the age of 60 after a qualifying period of 35 years. The standard
retirement age for that pension is 63 years, so their benefit is reduced for every month of
earlier take-up, with the exception of transitory periods for persons born before 1944. The
old-age pension after unemployment was introduced in 1957. The motive behind it was
supporting older workers who were especially affected by long-term unemployment and
faced difficulties with return to work (Jacobs et al. 1991: 202). Persons born before 1946
can apply for that pension after completion of their 60 th year. For persons born between
1946-1952, the pensionable age was raised stepwise from the age of 60 to 63. Table 3
depicts the currently valid retirement pathways and pensionable ages within the public
pension scheme.
A disability pathway is constituted by the subsequent use of sickness benefit (provided
by the firm for the first six weeks of an illness or after an accident and by the health fund for
up to one year and a half) and of the disability pension (Jacobs et al. 1991: 199). Since the
reform of 2001, disability pensions are granted for three years, after which a re-assessment
of the health status is undertaken. The new system distinguishes between the full disability
pension granted when the applicant is able to work less than three hours daily, and the
partial disability pension, if the applicant is able to work less than six hours daily. As a
disincentive to early retirement via the disability pension, deductions of 0.3% per month are
15 Those bonus/malus rules are actuarially neutral in the sense that they cover the loss or rise in the income of
DRV due to earlier or deferred retirement (Hoffmann 2007: 300). However, for those rules to be neutral with
regard to the incentives or disincentives to continued work they may pose (anreizneutral), the current amount
of 3.6 per cent per year should rise by half (Hinrichs 1998: 19).
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