The Advantages of Statutory Insurance for Self-Employed Persons

Authors: Dr. Jürgen Ehler, Dina Frommert/Location: Berlin

The development of profitable employment in the last years was, inter alia, charac-terized by an increase of self-employment. Within the group of self-employed per-sons, it was particulary the number of self-employed without obligatory pension pro-vision that grew. It is presumed that this group is in danger of old-age poverty above average, due to missing obligatory pension provision. Therefore, the implementa-tion of an obligatory pension provision for self-employed has been on the agenda for many years. The scope of proposals range from compulsory insurance in the statutory pension scheme to an obligation to take out private insurance with a free choice of contractor. The considerations discussed in this article and the empirical results of the study „Old Age Provision in Germany 2005” (“Altersvorsorge in Deutschland 2005 – AVID 2005”) speak in favor of a compulsory insurance in the statutory pension scheme. The authors take the employment biographies and the already existing privately funded old age provision of the respective persons into consideration. They came to the conclusion that those self-employed who are cov-ered by obligatory job-related pension schemes (e.g. lawyers) normally do not change their profession and that these groups of persons regularly provide privately for old age as well. On the other hand, persons who are self-employed only spo-radically and in-so-far not covered by an obligatory pension scheme, and persons without phases of self-employment cannot be accurately analyzed.

In many cases, self-employment without obligatory pension provision is only a phase of life. For this group of persons, privately funded old age provision doesn´t play an important role.

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