Germany's National Pension System

With horror stories about Social Security funding in and out of the news in the US, it's not surprising that other countries also have the problem. Here's one:

The German parliament on Thursday passed a modified version of legislation that will radically change the way national pension benefits are calculated. In the future, the level of retirement benefits will depend on the size of the workforce in relationship to the number of retirees. Pensions will automatically decline as the German population shrinks over the next 25 years.

The current pay-as-you-go national pension system relies on four workers supporting every retiree. In 25 years, there'll be only two workers per retiree and they intend to reduce pension payments accordingly.

German workers currently pay 19.5% of their gross income into the national pension program. For comparison, US workers are contributing about 8% of their gross into Social Security with another 8% contributed by the employer.