The German financial expert, Michael Rasch, suggests that the generational contract, which is under pressure due to demographics and increasing performance promises, could be relieved in the medium term through generation capital based on the stock market. Rasch dismisses the widespread fear of the uncertainties of the stock market in Germany, pointing to the long-term impressive performance of many stock indices. For example, the German stock index (DAX) has risen by 1300 percent since its inception in July 1988, with an average annual increase of 7.8 percent. Similarly, the MSCI World Index has achieved a total return of 2900 percent over the past 50 years, despite political and economic crises. However, Rasch emphasizes the need for two important conditions for entering an equity-based pillar of the pension system: political non-interference in the administration of the fund and full protection of the capital against political access. He fears that political interference could lead to changes in investment guidelines based on political ideology, moral beliefs, or geopolitical situations. Rasch also expresses concerns about the government potentially tapping into the pension fund during financial difficulties, citing examples from the debt crisis in the Eurozone. Overall, Rasch’s ideas highlight the potential benefits of an equity-based pension system, but also the importance of safeguarding the capital from political interference.

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Information	Details
Geography	Europe
Countries	🇩🇪
Sentiment	neutral
Relevance Score	1
People	Michael Rasch, None
Companies	Allensbach, Xing, Institut der Deutschen Wirtschaft, MLP, Linkedin, X
Currencies	None
Securities	None