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Linkedin stock germany5/28/2023 ![]() ![]() Nonetheless, he reckons, the plans provide a “glimmer of hope” that the government realises, at least, that the system needs reform.LinkedIn Corporation, together with its subsidiaries, operates an online professional network worldwide. ![]() That, says Marcel Fratzscher of the DIW, would require a change to the state retirement age, as well as labour-market reforms. These changes alone might do little to put the pension system on a sustainable footing and make pensioners better off. The tax-free personal allowance on capital gains will rise from €800 to €1,000 a year in 2023, and the coalition hopes to launch an inquiry into the creation of a Swedish-style public-investment fund. The coalition government also aims to make it easier for people to save for retirement outside their state pension. “The Swedes really aren’t known as turbo-capitalistic stock gamblers,” jokes Johannes Vogel, the party’s expert on pension politics. The FDP hopes that the planned changes to the pension scheme might increase Germans’ familiarity with stock investing. Even by 2020 the number of Germans investing in the stockmarket was still a shade below its 2001 level. Those who held Deutsche Telekom shares or who might remember the crash are less likely to hold stocks even today, as are their children, suggests research published last year by the German Institute for Economic Research ( DIW), a think-tank in Berlin. The share price soared seven-fold before crashing spectacularly in the early 2000s. Germans headed to the market in droves about 650,000 of the buyers of the newly issued stock were first-time punters. In 1996 Deutsche Telekom listed on the stockmarket. Then there are Germany’s scars from the dotcom era. Germany imposes a higher tax rate-of 25%-on long-term capital gains, for instance. This could in part reflect differences between the two countries’ tax systems. By contrast, more than half of all American households do so, much of it in the form of 401(k) retirement plans. Only around a quarter of households own stocks. Studies indicate that they are “market-shy” and tend to overestimate the risks from investing. The reaction to the government’s plan tells you much about Germans’ attitudes to capital markets. But the party hopes it may only be a first step towards a “stock-and-bond covered pension system”. The principal itself accounts for only about ten days of pension payments, says Martin Werding of the Ruhr University Bochum, who conducted a feasibility study of the FDP’s proposal ahead of the election. The government will funnel €10bn from its annual budget into a publicly managed pension fund, which will be invested in the stockmarket, and which may generate attractive returns. ![]() ![]() The plan outlined in Germany’s coalition deal is far more modest. Should the taxpayer decide against active investment, the money is deposited instead in a state fund, which since 2003 has made an annual return of 9.9%. Sweden’s system consists of a standard pension, to which taxpayers contribute 16% of their gross income, and a supplemental “premium” pension, through which 2.5% of each taxpayer’s income is placed into a stock fund of their choosing. In order to help fix the problem, the liberal FDP has long supported a plan to reshape the pension scheme along Swedish lines. The problem is only set to get worse as more baby-boomers retire. But shortfalls have meant that the government has had to subsidise the scheme, to the tune of €100bn last year. This is meant to fund the roughly €300bn ($340bn, or about 9% of GDP) paid out in pensions each year. Workers and bosses together pay a “pension tax” of about 18% of a worker’s gross wage. As retirees live longer, Germany’s pension system, which was established in 1889 by Otto von Bismarck, is buckling. ![]()
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