„Predicting political outomes is at least as uncertain as predicting the stock market”

Ralf Lochmüller, CEO of Lupus alpha, welcomed participants to Frankfurt’s Alte Oper in the immediate aftermath of Donald Trump’s landslide victory in the US presidential election and the political turbulence triggered by the collapse of Germany’s “traffic light coalition” between the SPD, FDP and Greens. Having originally planned to speak about “eventful times”, he described this as “the understatement of the year. ‘Earthquake’ would probably be a far better word for it.” It was not difficult to link these global events with the Investment Fokus event, with Lochmüller pointing out that “political forecasts are subject to at least as much uncertainty as stock market forecasts”. He then turned his attention to the German federal government’s comprehensive plans to reform state, occupational and private pensions. While these plans have become somewhat obsolete since the coalition’s collapse, Lochmüller emphasised that such reforms must also be at the very top of the new government’s agenda. 

“Pensions are an issue that is very close to my heart,” he said, before using a quote from Konrad Adenauer to underline the country’s ongoing pension woes: “People always have children.” Yet while these words rang true in the 1950s and were intended to demonstrate the sound logic of the pay-as-you-go system, they could not be further from the truth today. Lochmüller used alarming figures to illustrate Germany’s demographic trends: while there were still six contributors to the statutory pension scheme to finance each pensioner in 1960, this burden will fall on the shoulders of just 1.5 pension contributors by 2030. The numbers no longer add up. In his analysis, Lochmüller made a clear distinction between the different pillars of Germany’s pension landscape. Although he dubbed state pensions “probably unreformable”, he believes that occupational pensions are on a much better path, and emphasised the opportunities offered by placing a greater focus on equities. According to Lochmüller, occupational pensions in particular can contribute significantly to stabilising the entire system if up-to-date regulations are applied, while mandatory insurance would broaden this pension pillar further.

He singled out the idea of a retirement savings account (Altersvorsorgedepot) as a genuine step forward, as these accounts can reap the long-term benefits of compound interest, once described by Einstein as "the eighth wonder of the world". According to Lochmüller, this innovation could play a key role in solving Germany’s demographic challenges. “Let’s keep our fingers crossed that it also gets a chance under a new government,” he said in closing.