After months of labourious wrangling, the coalition has agreed on a package to reform statutory pension insurance. This includes the generational capital that the FDP fought for. However, there is not much left of the Liberals' plans to introduce a Scandinavian-style equity pension. Nor will this make the pension fit for the future – contrary to what the FDP suggests. The income from the generation capital is intended to stabilize the statutory pension. Unlike in Northern Europe, the distribution from the funded component is not allocated individually to the pensioners in this country, but is paid into the large pension pot for everyone. Moreover, it will take more than a decade for the debt-financed capital stock to yield any return at all – reduced by the interest on loans.

The envisaged assets of 200 billion euros will not be enough to noticeably relieve federal spending: the expected distribution of 10 billion euros will only cover a tiny part of the pension expenditure of almost 600 billion euros in 2035. The construction of the large pension pot, which will continue to be socialized, gives politicians a free hand to make costly benefit promises in future legislative periods in which they will no longer bear any responsibility. The new pension package improves the reduced earning capacity pension and removes the sustainability factor in order to stabilize the pension level at 48%. It is a mistake though to burden employers and the country's economic strength with foreseeable increases in contributions to more than 20%.

However, the new pension package does have one upside. With the generation capital, at least a foundation has been laid to refute the arguments of critics of a funded pension scheme: investing capital does not have to mean gambling with pensions if it is done wisely and in a risk-appropriate manner. It is now up to the capital market professionals to prove this. This could possibly lead to a broad-based funded pension scheme gaining a political majority in Germany as well.