Overview
- The government-appointed Rentenkommission delivered a 33-point report on Tuesday and Chancellor Friedrich Merz and Labor Minister Bärbel Bas said they want to implement the package largely intact and begin drafting laws before the end of 2026.
- A new partly capital-funded pillar would start in 2028, rise in stages to 2 percent of gross income by 2031, be split equally between employers and employees, be centrally managed in lifecycle portfolios and convert balances into lifelong annuities at retirement.
- The commission recommends raising the statutory retirement age gradually above 67, ending the abschlagsfreie 'Rente mit 63', allowing early retirement with cuts no earlier than 64 and tightening rules for part-time pre-retirement and other exceptions.
- After 2031 the suspended Nachhaltigkeitsfaktor would be reintroduced with Alpha raised from 0.25 to 0.33 so that annual pension indexation is partially damped to share demographic costs between pensioners and contributors.
- The plan has drawn broad pushback from trade unions and social groups over market risk and burdens on low earners while some business and conservative voices support it, and lawmakers face legal, political and technical hurdles before the measures can become law.