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Germany Unveils Plan to Overhaul Civil‑Servant Pensions

The government-backed package seeks to reduce future state costs by calculating Beamte pensions from the last five to ten years of pay rather than a single final salary.

Overview

  • A government-appointed Rentenkommission published a 33-point reform package in late June that Chancellor Friedrich Merz and Labor Minister Bärbel Bas said they want to implement in full.
  • Commission member Peter Bofinger and the report propose basing Beamte pensions on earnings from the last five to ten years and extending the current two-year rule to five to ten years to block end‑of‑career promotions that raise payouts.
  • The commission recommends sharply restricting future verbeamtungen to roles with core sovereign powers and requires that Bund and Länder build budgetary reserves for any new civil‑service hires.
  • The panel rejected moving existing Beamte into the statutory pension system because of constitutional limits, Länder competence and the risk of a decades‑long transition that would double budget burdens for states and the federal government.
  • The proposal responds to rising costs and numbers—about 1.4 million pensioners with an average gross pension of €3,416 and roughly €56.9 billion in pension payments in 2024—and has drawn support from the SoVD and calls from fiscal watchdogs for stronger safeguards for Länder budgets.