The FT reckons that what has been  put forward in Germany is an ambitious move that could have positive Europe-wide implications

It must be important for their “editorial board” to put their heads together to consider it.

How it will work

Linking the retirement age to life expectancy is projected to mean only a gradual increase — to 67.5 by 2041 and 70 by 2091. But economists say this is the only sound way to stabilise the system, without spiralling payroll taxes or huge federal subsidies. Narrowing early retirement rights will address a drain of experienced workers amid acute skills shortages.

It will not be a move to defined contribution system of pots owned personally. Infact it will be quite the opposite while still being a funded pension. The fund will guarantee pensions , backed by the Government. The impact will be small but universal.

Anne-Sylvaine tells us

The editorial board give us more detail

A compulsory initial contribution of 0.5 per cent of employees’ pre-tax income, rising to 2 per cent by 2031, will go into a Swedish-style public pension fund managed centrally and invested in capital markets. Contributions are split 50/50 between employees and employers. The statutory minimum retirement age of 67 is set to rise in line with life expectancy; rights to early retirement for people with 45 years of contributions will be restricted.

There is a proposal here that will no doubt be contended in Germany and considered in other countries. I am quite sure that the brains of our top actuaries will be exercised.

Thanks to the FT, I hope that we get more on the development of this.