Just in case this issue is relevant to anyone else out there (not likely, but it helps me to vent!), I've done some more digging into it and it is still pissing me off to no end. Here are the essential points:
- The law is in discussion, has been postponed due to the Corona pandemic. It is being challenged by various groups, but will in all likelihood be enacted at some undefined point in the future.
- As a self-employed person, you will be required to pay 18.6% (!) of your earnings BEFORE tax into the state pension system. Right now I'm not required to pay anything, and I have no right to any pension from the state when I retire.
- If you are above 50, you will be exempted from the new law.
- If you are above 40, you may be able to opt out if you can prove you have enough of a pension already underway (my situation). Here's the kicker though - Stocks and bonds, as well as investment funds are NOT considered an acceptable pension alternative by the German government. 'Acceptable' alternatives to the state pension plan are the registered tax-deductible plans such as Riester, Rürup, Lebensversicherungen... which are all total shit.
Since my pension plan has always been to do it with a balanced investment portfolio, this new law would derail my financial plans entirely. It would amount to an additional 8 to 10 thousand Euros per year in payments I would have to make, which would be so much better invested in ETF's. I worked the state pension plan ROI to be around minus 1%/year not including opportunity costs. The Rürup pension plan for example is run through insurance companies, and they are required by law to pay you back at least 80% of what you paid in (that's right, guaranteed negative returns!), capital goes to them when you die (not inheritable). In my situation, this new law could cost me hundreds of thousands of Euros in potential lost earnings on investments. It would also force me to work more hours for more years than I want to. You can see why I'm a bit burned up about it.
Here's a great summary I found online (in German):
https://lixxil.de/allgemein/rentenversicherungspflicht-fuer-selbstaendige/Ugh.