Mandatory Pension Savings and a Later Retirement Age: Germany’s Social Partners Dig in for a Long Fight
23.06.2026 - 21:28:43 | boerse-global.de
A government-appointed commission on retirement security has laid out proposals that threaten to reopen deep fissures between employers, unions and insurers. At the heart of the plan is a mandatory capital-funded supplementary pension — modelled on Sweden’s system — that would require workers to contribute between 0.5 and 2 percent of their gross wages starting in 2028. At the same time, the commission recommends pushing the standard retirement age to 67.5 by 2041 and phasing out the so-called “pension at 63” for those with very long contribution records.
The recommendations aim to guarantee a combined replacement rate of at least 70 percent of net income from all pillars of the pension system. But the concrete proposals have sparked immediate pushback.
Employers reject compulsion, unions demand more
The Federation of German Industries (BDA) called the concept “courageous” but flatly opposes any mandatory element. Business leaders insist that participation in the new capital pillar must remain voluntary.
Trade unions take the opposite view. DGB chairwoman Yasmin Fahimi on Tuesday called for a compulsory, employer-funded occupational pension for all workers. Currently, only 52 percent of employees subject to social security contributions have access to a company pension scheme (bAV). While the DGB and Verdi sharply criticised both the elimination of the deduction-free early pension and the rise in the retirement age, IG Metall signalled support for expanding the bAV.
Insurers split on state role
The insurance industry is divided. R+V Versicherung, which launched an industry-wide model for the chemical sector in 2022, backs the commission’s approach. The company points out that social-partner models without rigid guarantees can allocate up to 80 percent of contributions to equities, “significantly improving return prospects for employees.”
In contrast, the German Insurance Association (GDV) warned against excessive state dominance in funded pension provision. The GDV argues for strengthening the existing private and occupational systems rather than creating a new mandatory state-managed pillar.
Industry body pushes for faster implementation and lower hurdles
The German Association for Occupational Pensions (aba) broadly welcomes the proposals but is pressing for immediate talks with the social partners. “We need to involve small and medium-sized enterprises much more,” said aba chairwoman Beate Petry.
The aba calls for lowering the entry barriers to social-partner models and cutting red tape. A key demand is to reduce the 100-percent contribution guarantee that currently applies, arguing that in a low-interest environment this lock-in depresses returns. The association also wants better subsidies for low earners and a digital overhaul of bAV administration.
Missing details and a call for sustainability factors
Guido Bader of Stuttgarter Lebensversicherung assessed the proposals as “a necessary first step” but noted that “there is still a lack of depth in the details.” From the industry, additional demands have emerged: reactivating the sustainability factor in pension calculations and creating more attractive incentives for people to work beyond the standard retirement age.
The commission’s blueprint now enters a phase of political and social negotiation. With an implementation date of 2028 and a gradual retirement-age shift stretching to 2041, the debate over who pays — and who benefits — has only just begun.
