Bundesbank Calls to End 45-Year No-Penalty Early Retirement Rule as Government Holds Firm
The Bundesbank has urged scrapping the no-deduction early pension for long-service contributors; the government says the measure will stay in place for about 30% of new retirees.
Overview
- The Bundesbank’s June 2025 monthly report recommended ending the 45-year contribution exception to uphold the pension system’s equivalence principle.
- The federal government announced in July 2025 that it will keep the deduction-free early retirement path for those with 45 years of contributions.
- Nearly 29.3% of new retirees in 2023—around 230,000 people—used the long-service exception to retire early without pension reductions.
- Since 2023, retirees can earn unlimited income from work and still make pension contributions after the earnings limit was abolished.
- Insured persons with 35 contribution years can retire at age 63 under the Flexi-Rente scheme, accepting a 0.3% monthly deduction in benefits up to a 14.4% cap.