State pension refunds on dying before retirement

Is there anybody can tell me what happens if:

One person lives in Germany for more that 40 years, citizen, working and paying for pension insurance all those years. This person dies before retirement. No wife only 3 kids (grown, non citizens live in other countries) left behind.

What happens with the pension insurance in this case. Any info is appreciated.

Thanks

I believe it is analogue to "game over, you lost".

Just like an ex-colleague who died at 64 with no husband or children....

Even in this case his kids will not receive any of his pension benefits?

I believe not (given that you say they are grown up).

They won't get anything.

It's entirely normal for a state mutual insurance thing. You aren't building up a fund as with many private pensions (such as where units are cased upand reimbursed to your estate if you die before retirement).

There are net payers and net recipients. The big net payers are of course unmarried people that pay for decades and die without ever getting any pension. The big recipients are people who live to old age and have a much younger spouse who then gets paids for decades more after the pensioner's death!

children would only receive a kind of "orphans" pension if they are still underage and without their own income. The German pension system does not mean that YOU personally build up a capital stock from which you receive your pension later on, rather those who pay the pension contributions now pay for the pension of the current pensioneers and can only hope that when they are old enough to get a pension that there will be still enough people around working and paying pension contributions.... which is why, given the current demographic development, the German pension system is bound to collapes some decades from now if no major reform of the system is undertaken now. Which is not very likely given the current political situation...

As you can see: if there is no capital stock build up with the pension contributions from the past, there can be nothing to be inherited by the children or anyone else... it is just that the German pension system says "Thank you" for someone to ease the burden of the system by being friendly enough to die early... There is a bad joke already in Germany about how the pension crisis can be solved: starting from 2009 pensioneers are allowed to cross the street when the traffic lights are red/stop, starting from 2010 they have to cross when the traffic lights show red/stop....

Cheerio

Does this explain why cigarettes are so cheap here?

Seriously, since the marriage and birth rates are so low, one would expect that the system would end up okay (US Social security has supposedly been on the brink of bankruptcy for my entire life, but immigration saved the day) ... or are life expectancies outstripping these factors?

The lack of "capital stock" appears to be perhaps the most compelling argument for the introuduction of either Australian-style superannuation schemes or self-directed US 401k-style plans, no? Then why don't we see more of them?

Germany - Life expectancy at birth:

total population: 79.1 years
male: 76.11 years
female: 82.26 years (2008 est.)

Probably yes. Perhaps we should invite the NRA to introduce some changes to German gun laws as well...


on the contrary... birthrate is shrinking for long time (last year was appearantly the first year where this changed, but too early to call it a turn-around yet) and people are living longer then the pension system anticipated. I am 40 years and don't expect to get more then a Hartz-IV like payment from public pension eventually (which is why I do not pay in as a self-employed). The sad thing is that the demographic problem was clear already in the second half of the 1980s even among some policitians like Prof.Kurt Biedenkopf, but the policital leaderhsip did not want to rock the pensioneer-boat because they became more and more important in elections... so they were told "Die Renten sind sicher!" which was a blatant lie...


Because it would mean in Germany that you have to tell current pensioneer and people shortly before their pension now that there pension will have to be reduced while you have to tell the working population that more money is needed for their pension in old age... hard to survive this politically...

Cheerio