Pension Policy After the Budget Verdict: No Maximum Demands

German pension policy faces a dilemma. If it is too generous, it harms contributors, disincentivises labour supply, and crowds out education and infrastructure investment needed to pay for social protection. If it is too frugal, it harms those with social and health issues. Thus, smart compromises are required rather than maximum demands. We propose a policy mix with five elements: 1) determine the pension level in a sustainable and generation-appropriate way; 2) link retirement age to life expectancy; 3) limit early retirement to those in poor health; 4) abolish mandatory retirement; 5) encourage a mix of pay-as-you-go and funded occupational pensions.