Overview

• Draft legislation fixes the statutory pension replacement rate at 48 percent of average wages until 2031.
• Expanded Mütterrente credits will grant parents of children born before 1992 three years of child-rearing time.
• The reforms will be funded by increased federal tax subsidies, a contribution rate rise from 18.6 to 18.8 percent in 2027, and reimbursements starting at €3.6 billion in 2029.
• Removal of the pre-employment ban allows retirees to work up to eight years under a maximum of twelve fixed-term contracts.
• An expert commission will convene after the summer recess to propose deeper structural reforms by mid-2027 amid concerns over long-term financing pressures.