Q&A Document: Strengthening Pension Systems Through Capital Markets in Germany and Europe

This Q&A document delves into the arguments presented by Stephan Leithner, CEO of Deutsche Börse Group, and summarizes the key message: Germany needs stronger pensions now. Statutory systems must be complemented by occupational and private schemes using capital markets.

• Q: What is Deutsche Börse Group’s position on reforming Germany’s pension system?
  • A: Deutsche Börse Group supports a fundamental rethink of Germany’s pension system, emphasizing that the statutory pension must remain the foundation but cannot shoulder future challenges alone. Complementary occupational and private pension schemes are essential to creating a sustainable and fair system.

• Q: Why does CEO Stephan Leithner call for urgent action on pensions?
  • A: CEO Stephan Leithner highlights that increasing federal budget transfers to the pension system are crowding out investment in critical areas such as infrastructure, education, and national security. Without reform, this approach is financially unsustainable for Germany.

• Q: What role should occupational pensions play according to Deutsche Börse Group?
  • ​​​​​​​A: Deutsche Börse Group argues that occupational pensions should take on a much stronger role and become a standard part of every employment contract. This is seen as a key element of employers’ social responsibility and a cornerstone of a robust three pillar pension system.

• Q: Why are social partners important in pension reform?
  • ​​​​​​​A: The strengthening of occupational pensions requires close cooperation between trade unions and employers. Deutsche Börse Group notes strong willingness on both sides, which is crucial for building consensus and implementing effective reforms.

• Q: How does Deutsche Börse Group assess recent German pension initiatives?
  • ​​​​​​​A: Deutsche Börse Group views initiatives such as the “Frühstartrente,” the retirement savings account, and the recent private pensions reform as important first steps. These measures demonstrate political momentum that should be followed by comprehensive structural reforms.

• Q: What is expected from the pension commission’s findings?
  • ​​​​​​​A: The pension commission’s findings are expected to deliver a major breakthrough by translating initial reforms into a coherent long-term framework. Deutsche Börse Group emphasizes that the pressure to find solutions is greater than ever, in Germany and across Europe.

• Q: Why are pension systems a question of social and intergenerational fairness?
  • ​​​​​​​A: Pension levels directly influence quality of life, particularly for people with low incomes. Deutsche Börse Group stresses that fair pension design ensures social cohesion today while preventing excessive burdens on future generations.

• Q: How can capital markets contribute to sustainable pensions?
  • ​​​​​​​A: Capital markets enable long-term wealth creation by connecting savings with productive investments. Deutsche Börse Group believes that broader access to capital market based pension solutions allows more people to benefit from economic growth and reduces reliance on public budgets.

• Q: What role does Deutsche Börse Group play in pension sustainability?
  • ​​​​​​​A: As Europe’s leading provider of capital market infrastructure, Deutsche Börse Group is building an integrated ecosystem to strengthen European capital markets. This infrastructure supports sustainable pension funding by efficiently channeling long-term savings into productive investments.

• Q: Why is pension reform also a European issue?
  • ​​​​​​​A: Demographic pressures and funding gaps affect many European countries. Deutsche Börse Group underscores that the urgency of pension reform extends beyond Germany and requires coordinated thinking at the European level to ensure long-term stability.