Merz Backs 33 Pension Reforms, Raising Germany's Retirement Age From 2031
Updated
Updated · The Associated Press · Jun 23
Merz Backs 33 Pension Reforms, Raising Germany's Retirement Age From 2031
3 articles · Updated · The Associated Press · Jun 23
Summary
Friedrich Merz said his coalition will quickly implement all 33 pension proposals, including linking Germany’s retirement age to life expectancy from 2031 and calling failure “not an option.”
The expert panel aims to stop pension levels falling and avoid a steep long-term rise in employee contributions, which now stand at 18.6% of gross wages as fewer workers support more retirees.
Key measures also include adding market-based pension investments modeled on Sweden, ending the full benefit for retirement at 63 after 45 contribution years, and lifting that minimum age to 64.
The package would also raise the age for cutting working hours before retirement from 55 to 58; co-chair Constanze Janda said the life-expectancy link would add about six months over 10 years at current trends.
The overhaul lands as Germany’s 83.5 million population ages and the unpopular coalition governs with a thin minority, facing union criticism and an economy expected to grow just 0.5% this year.
As Germany pushes retirement to 70, are workers being set up for a future of burnout or poverty?
Germany is betting on the stock market to save its pensions. What happens to retirees if the market crashes?
Germany’s Pension Overhaul 2026: Raising Retirement Age, New Capital Pillar, and 33 Key Reforms
Overview
Germany has completed a major private pension reform act in May 2026, aiming to simplify and modernize the pension system. Starting January 2027, a new private pension system will launch, allowing providers to offer products with or without guarantees on contributions. While guarantees offer downside protection, they usually come with higher costs and lower expected returns. The government’s pension commission plans to further improve accessibility and efficiency by recommending the removal of guarantees and expanding defined contribution plans to small and medium-sized enterprises. These changes are designed to make private pensions more flexible and attractive for a wider range of people.