Overview

• The draft law would extend the pension replacement rate of 48 percent of average earnings through 2031 to prevent further divergence between wages and pensions.
• It retroactively extends child-rearing credit to three years for parents of children born before 1992, with payments earmarked to begin in 2028 due to technical and bureaucratic delays.
• The proposal lifts the ban on rehiring retirees on fixed-term contracts to facilitate continued employment beyond the statutory retirement age.
• All additional expenditures are to be covered by federal tax revenue rather than social security contributions, shielding contribution rates from rising.
• Projected federal reimbursements for the reforms are forecast to reach about €14.9 billion in 2030 and climb to €20 billion by 2040, prompting employer groups to warn of long-term fiscal strain.