Overview

• The draft bill, introduced June 26 by Social Minister Bärbel Bas, anchors the pension replacement rate at 48 percent until 2031 to prevent its slide below wages.
• It allocates roughly €42 billion in federal tax funding over six years, with annual subsidies ramping from €4.1 billion in 2029 to €11.2 billion in 2031.
• The legislation includes Mütterrente III to grant three years of childcare credits for pre-1992 births, with payouts deferred until 2028 for technical preparations.
• Starting January 2026, the Frühstart-Rente will channel €10 per month into private retirement accounts for children aged 6 to 18, while the proposed Aktivrente would allow retirees to earn up to €2 000 tax-free once enacted.
• Employers warn the package risks straining public finances, and unions as well as left-wing parties argue that a 48 percent replacement rate falls short and pressures for greater fairness.