German coalition negotiators agree on pensions reform

BERLIN, Feb. 1 (Xinhua) -- "Grand coalition" negotiators from German Chancellor Angela Merkel's CDU/CSU bloc and Social Democrats (SPD) have agreed on a reform of the pension system during final-stage coalition negotiations on Thursday.

According to a joint proposal, the guaranteed level of retirement payments covered by social insurance would be raised from 43 percent to 48 percent of a pensioner's final working incomes.

The prospective coalition partners described the change as a milestone for millions of Germans which would offer them greater financial security in old age.

At the same time, however, the negotiators admitted that the reform would necessarily also imply costs in billions of euros for the German government.

"I can predict that the improvements we have made will cost a figure in the billions of euros as it affects millions of people," SPD parliamentary faction leader Andrea Nahles told reporters.

"People will get something concrete in return," she added.

Nahles and her corresponding CDU negotiator Karl-Josef Laumann emphasized that their parties shared the same vision on the subject of pension reform and noted that the proposal reflected an earlier proposal enshrined in a preliminary coalition agreement.

Together with the increase in the guaranteed level of retirement payments, a new regulation that contribution rates should not exceed 20 percent of income will apply until 2025.

The CDU/CSU conservative sister parties and SPD announced that an expert commission staffed by scientists, labor and employer representatives would draft proposals for subsequent steps by March 2020.

The "grand coalition" parties have identified the prevention of old-age poverty as a key objective for a fourth governing cabinet under Chancellor Angela Merkel. Enditem