Overview
- Labor Minister Alexander Schweitzer has publicly said he will seek a prompt compromise with the Union on the pension overhaul while leaving the fate of the 'Rente mit 63' unresolved.
- A government commission proposed abolishing the abschlagsfreie early pension after 45 contribution years and replacing it with targeted protection for people who cannot continue working for health or occupational reasons.
- The coalition is split over the commission's package, with Chancellor Friedrich Merz and Economics Minister Katherina Reiche backing broad implementation and parts of the SPD, several state leaders and the CSU pushing for protections or limits.
- Independent analyses and administration data shape the debate: the DIW estimates roughly €10 billion in savings per retiring cohort and about 125,000 more people remaining in work if the early pension is phased out, while DRV figures show higher use of the rule in eastern states (32.8% in 2025) than in western states (28%).
- Negotiators are weighing narrower options such as raising required contribution years to 46 or 47 or limiting no‑penalty early retirement to hardship and health cases, and the reform still faces possible resistance in the Bundesrat and from state leaders; under current law people born in 1964 or later who retire at 63 with 45 years face up to a 14.4 percent permanent deduction.