Germany’s Push for Mandatory Company Pensions Splits Coalition and Business
11.06.2026 - 00:02:31 | boerse-global.de
Germany’s finance minister has thrown his weight behind a plan to make occupational pensions compulsory, a move that would affect millions of workers but is drawing fierce opposition from employer groups. Lars Klingbeil of the Social Democrats (SPD) endorsed the proposal during a televised debate on Monday, aligning himself with the German Trade Union Federation (DGB) in calling for mandatory company-based retirement savings.
The DGB wants to anchor the obligation through collective bargaining agreements, covering all employees. Union chairwoman Yasmin Fahimi pointed out that roughly 20 million people subject to social insurance contributions currently have no access to a company pension scheme. Official figures from late 2023 show that only 52 percent of eligible workers had one.
Klingbeil argued that the pension system must be made fit for the future across all three pillars — state, occupational and private. A mandatory component, he said, could help stabilise the system. He also referenced the planned “Frühstart-Rente” (early-start pension), under which the state would invest ten euros per child each month into a retirement savings account from birth.
Support came from the Christian-Democratic Workers’ Association (CDA), whose chairman Dennis Radtke called the plan appropriate.
Employers warn of cost overload and red tape
The business community pushed back sharply. Rainer Dulger, president of the Confederation of German Employers (BDA), demanded cost restraints and a return to the sustainability factor in pension calculation. He insisted the retirement age must rise and that the contribution rate should not exceed 20 percent.
Gitta Connemann of the Mittelstandsunion, which represents small and medium-sized enterprises, warned that smaller firms would be financially overburdened. Wolfgang Steiger, secretary general of the CDU’s Economic Council, rejected any compulsory element, arguing it would restrict employees’ freedom of choice and make labour more expensive. Stefan Langhof, also an employer representative, added that tracking long-term entitlements would create significant administrative hurdles.
Within the governing coalition, positions diverge. The SPD and Greens signal sympathy for an obligatory offer but stress that workers must retain the option to opt out.
Summer of pension talks and looming deadlines
The debate unfolds during a period of intense negotiations. A high-level meeting between the Union parties, the SPD and social partners is scheduled for today. The government’s pension commission is expected to deliver its recommendations at the end of June — either on the 28th or 30th. The DGB plans to publish its specific cornerstones for the mandatory model around the same time.
Separately, state pensions will rise by 4.24 percent on July 1, benefiting about 21 million retirees. A further increase of 4.7 percent is forecast for the following year. The pension level is fixed at 48 percent through 2031. Before the summer break, the coalition intends to convene a committee to vote on the occupational pension proposals and the commission’s findings.
