Overview
- On Friday, Federal Labour Minister Bärbel Bas defended the government’s pension reform in the Bundestag and pledged a formal Vertrauensschutz to protect people close to current entitlements.
- A draft law is being prepared in the Federal Ministry of Labour to implement the Rentenkommission’s recommendation to abolish the so-called 'Rente mit 63', which allowed people with at least 45 insurance years to retire early without deductions.
- Chancellor Friedrich Merz has framed ending the entitlement as a core element of the package, but parts of the SPD and several East German CDU minister-presidents are pressing for further review of costs and fairness.
- Budget pressure underpins the push for change: the Labour Ministry’s 2027 proposal allocates about €201.46 billion, with most of that earmarked for pensions and long-term fiscal sustainability cited as the reason for reform.
- Practical effects and political sensitivity drive the debate because the 2023 removal of earnings limits lets some pensioners collect a pension while continuing to work and because roughly 30 percent of new old-age pensions are for long-term insured people, a share that is higher in East Germany.