Schroeder Seeks German Union Support for Revamped Pension Plan
Chancellor Gerhard Schroeder and his Labor minister, Walter Riester, were due late Sunday to meet leaders of Germany's powerful trade unions to try to win support for changes to the government's controversial pension plan.
The low-key talks, in Schroeder's home town of Hanover, follow an announcement Friday by the ruling Social Democrat-led coalition that they had revamped the pension plan, which had been sharply criticized by the unions.
Under pressure from the unions and the left wing of the Social Democrat Party (SPD), Riester announced Friday that pensions would not fall below 67 percent of working income, compared to their present level of 70 percent.
An initial plan agreed by the government on November 15 would have cut the level to 64 percent of salary by 2030.
The government has also dropped a much-criticized aspect of that plan whereby people going into retirement between 2011 and 2030 would have had their pensions cut by up to six percent, thus introducing aged-based differences in pension levels.
The German pay-as-you-earn old-age pension system has been coming under increasing financial strain because retirees are living longer while proportionately less people are in work, pushing up contributions to unacceptable levels and weighing on labor costs.
Following major tax changes earlier this year, Schroeder has had his sights set on pushing pension reform through parliament, presenting this as a second central plank of his legislative program.
In particular, the chancellor has insisted that, whatever else, an element of private capital investment must be introduced into the pensions system. However the conservative opposition, which basically supports the reform's aims, has criticized the latest plans as "botched".
Employers and industrialists, who want the system at least partially privatized, also fear that the long-promised changes will not be enough now. But the unions, on the other hand, have said the government could lose electoral support if they are too severe.
Those views could be tested in two major German regional states, Baden-Wuerttemberg and Rhineland-Palatinate, which hold elections next March -- BERLIN (AFP)
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