German Pension Commission’s 33-Point Plan Targets Later Retirement and a New Capital Pillar – but Unions Pledge Resistance
22.06.2026 - 16:05:15 | boerse-global.de
A government-backed commission handed over its final report on Monday, packing 33 recommendations for overhauling Germany’s statutory pension system. The proposals, which include a new capital-funded pillar, a gradual rise in the retirement age, and a broader contribution base, immediately drew sharp lines between employers and labour unions.
Under the commission’s core design, a capital pension financed by 2 percent of gross wages – split equally between employers and employees – would supplement the pay-as-you-go system. The regular retirement age, already set to hit 67, would climb by six months every ten years after that threshold. Workers with long contribution records would see the early retirement window shift from 63 to 64, while the option to claim a full pension after 45 years without deductions would be scrapped. Partial retirement schemes (Altersteilzeit) would start no earlier than age 58, and the so-called block model – where workers reduce hours only in the second half of the programme – would be eliminated.
The commission also proposes expanding the insured pool to include the self-employed, civil servants, and members of parliament. Despite these measures, it forecasts the contribution rate will hit 19.9 percent by 2028.
The report arrived as the federal government and major business and labour associations held their second round of talks in the Chancellery on Monday – a dialogue process that began on 10 June. Head of the Chancellery Thorsten Frei (CDU) met with social partners to discuss a broader reform agenda covering the labour market, tax policy, bureaucracy reduction, and shoring up social insurance funds. Chancellor Friedrich Merz (CDU) did not attend but stressed the fundamental necessity of changes. The black-red coalition aims to push through legislation before the summer parliamentary break, though details remain contested.
Employers’ president Rainer Dulger and economist Monika Schnitzer, a member of the German Council of Economic Experts, welcomed the pension proposals. The Senioren-Union, a conservative seniors’ group, urged swift implementation.
Labour unions fired back fast. Verdi and IG Metall had already condemned the plans on Sunday. IG Metall chairwoman Christiane Benner promised a determined fight, citing the projected drop in the pension level from 2031 and the rising retirement age as unacceptable. Political opposition came from the left, too: Juso (Young Socialists) leader Philipp Türmer called linking the retirement age to life expectancy “socially unjust,” and Left Party parliamentary group leader Sören Pellmann warned of imminent pension cuts. The only backing from critics came for including politicians in the system and for abolishing Minijobs – a long-standing union demand.
