Skyrocketing Civil Servant Pensions in Thuringia: An Unsustainable Financial Burden
Uncontrolled Escalation: Public Employee Pension Costs Continue to Soar - Ballooning pension disbursements for public officials scrutinized by the Audit Court
Thuringia's financial health takes a hit as it fails to prepare for an exponential rise in civil servant pension payments. Kirsten Butzke, Thuringia's State Auditor President, voiced concerns in Rudolstadt to the German Press Agency, stating that the state's prudent measures are dismally inadequate given the escalating pension expenses.
In just a decade, the state's pension payouts to retired civil servants have ballooned almost threefold. According to the Audit Office, they were around 136 million euros in 2015 and hit 450 million euros by 2024—with projections pointing to billions in annual payments in the near future.
Ticking Time Bomb: Burgeoning Pension Expenses
The state has been grappling with an escalating number of retired civil servants since the 2000s. In the early 2000s, there were approximately 400 pensioners, swelling to more than 3,300 by 2010, and nearing 16,000 by 2024.
The looming explosion in pension costs is yet to peak, with the 2030s expected to see the first full generation of civil servants drawing pensions. By 2039, the state could be shelling out pensions to around 28,500 retired civil servants.
The escalating pension expenditure is projected to surge at a faster rate than the rest of the state's expenses in the coming years, according to Butzke. The Audit Office anticipates an annual increase of around ten percent, including salary adjustments, resulting in an additional 50-60 million euros in expenditure annually by the 2030s. By the end of the decade, Thuringia could be shelling out up to 1.2 billion euros per year in pension expenses.
"Thuringia is following suit with the conditions in the old federal states, which have been spending between seven and ten percent of their adjusted income on pension benefits for years," said Butzke. Despite this, the Audit Office believes that the underfunding in pensions for civil servants before 2017 cannot be rectified.
The Audit Office's Take on Civil Servant Appointments
Given the financial strain, the state should resume financing pension liabilities. Since 2018, a reduction in the state's debt of 5,500 euros per year for each new civil servant employee has been the norm—with reductions amounting to around 328 million euros in other years.
The Audit Office advocates for civil servant appointments in critical core areas such as the police, judiciary, and financial administration. However, in other areas, they recommend reevaluating the necessity of civil servant appointments.
If civil servant appointments are only offered to boost competition among states, like for teachers, the long-term costs must be taken into account, warned Thuringia's financial controllers. Lower costs during active employment should not overshadow the long-term pension costs.
Civil Servant Pensions, Audit Office, Thuringia, Pension Payments, Rudolstadt, Provisions, German Press Agency.
- To mitigate the financial pressure of escalating pension payments, Thuringia's Audit Office suggests revisiting their community policy regarding civil servant appointments, particularly in non-critical core areas.
- The Audit Office, in response to the looming pension crisis in Thuringia, emphasizes the importance of allocating resources for vocational training programs to prepare future civil servants, with the aim of decreasing pension expenditure in the long run.
- In light of the mounting pension expenses, Thuringia's State Auditor President, Kirsten Butzke, calls for a reevaluation of financial policies and legislation, considering the implications of pension payments on the state's overall borrowing capacity, and its impact on business and politics.
