Pensions in Germany Pensions in Germany Pensions in Germany are based on a “three pillar system”. The scheme is based on the pay-as-you-go (or redistributive) model. Funds paid in by contributors (employees and employers) are not saved (or invested) but are used to pay current pension obligations. Civil servants in Germany do not pay any contributions themselves but their salaries are correspondingly lower than those in the private sector. Recent changes to the system mean that from 2012 to 2023 the retirement age will go up to 66 by 2023. From 2023 the retirement age will be increased by two months each year,
Old-Age Pensions Act 1908 age of 70, with the cost being borne by younger generations. It was enacted in January 1909 and paid a weekly pension of 5s a week (7s 6d for married couples) to half a million who were eligible. The level of benefit was deliberately set low to encourage workers to also make their own provision for retirement. In order to be eligible, they had to be earning less than £31. 10s. per year, and had to pass a 'character test'; only those with a 'good character' could receive the pensions. One also had to have been a UK resident for