German Chancellor Friedrich Merz has backed a proposal from a special expert commission to gradually increase the statutory retirement age beyond 67. The plan includes indexing the retirement age to average life expectancy and introducing an additional contribution from employees and employers.
The German government has officially supported recommendations made by a commission of economists, labor law experts, doctors and parliamentarians. Under current rules, a full pension is available at age 66, provided the recipient has paid contributions for at least 45 years. Starting in 2031, the required contribution period would increase by one month each year for ten years. In later years, the retirement age would be linked to changes in average life expectancy.
The commission also proposed a supplementary pension contribution of 2 percent of monthly income, split equally between employers and employees. This additional payment is intended to provide a financial buffer for the system, which is under increasing strain from an aging population and rising costs.
Political support and union opposition
– We support the commission’s proposals to secure pension financing for future generations – said Chancellor Merz on behalf of the entire cabinet. – The reforms are necessary and long overdue.
Federal Minister of Labor Barbel Bas called for the legislation to be fast-tracked through the Bundestag. – Every month of delay worsens the financial stability of the system – she stated. In contrast, trade unions have strongly criticized the plans, arguing that raising the retirement age and increasing contributions unfairly burden workers.
Deteriorating financial outlook
According to the latest report from the German Pension Insurance (Deutsche Rentenversicherung), at the end of 2025, 19.1 million people were receiving pension benefits. Total annual expenditure on pensions reached 301 billion euros in the previous year. The growing number of retirees and longer life expectancy are putting pressure on a pay-as-you-go system already running deficits.
The proposed changes aim to prevent a sharp increase in contribution rates or a cut in benefits. However, critics point out that even with these adjustments, the system’s long-term sustainability remains uncertain without broader economic reforms.
Źródło: WNP.PL, Fot. Mahmoud Mahdi Photo / Shutterstock
