Merkel’s SPD rivals make election pledge to keep pensions stable

Germany’s Social Democrats (SPD) unveiled plans on Wednesday to keep pensions stable and cap contributions in an effort to win over voters in a September election and unseat conservative Chancellor Angela Merkel who is seeking a fourth term.

The centre-left SPD, junior party in Merkel’s current right-left coalition, hopes its pension plans will help put the issue of social justice at the heart of the election, though it has not weighed very heavily so far among voters.

The SPD has lost the momentum it gained after first nominating former European Parliament chief Martin Schulz in January as its candidate for chancellor to run against Merkel. A poll on Wednesday showed the conservatives’ lead over the SPD had widened to 15 points.

Schulz said his party wanted to preserve the level of pensions at 48 percent of an average salary until 2030. Pensions are projected to fall to 44.7 percent of wages by 2030 as the government tries to rein in costs as the population ages.

The party also aims to cap contributions, equally divided between workers and employers, at 21.8 percent of salary by 2030 from 18.7 percent.

“We want to ensure dignity in old age,” Schulz told reporters, promising to keep the retirement age at 67.

The extra cost for these commitments would be paid for by making some three million self-employed people pay contributions, increasing the contributions faster and lifting funding from tax to 15.3 billion euros in 2030 from 14.5 billion euros now.

However, the radical Left party attacked the plans for not going far enough.

“Whoever wants to stop poverty in old age must not limit themselves to stopping a further fall in pensions but must make sure that they go up,” said Left leader Bernd Riexinger.