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 Kingdom, the state pension age for men and women will rise to 66 in 2020 with further increases scheduled after that." Originally, the purpose of old age pensions was to prevent elderly persons from being reduced to beggary, which is still common in some underdeveloped countries, but growing life expectancies and older populations have brought into question the model under which pension systems were designed. By 1990, the United States was spending 30 per cent of its budget on the elderly, compared with 2 per cent on education. The dominant perception of the American old age population changed from "needy"