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Germany’s Pension Clash Intensifies as 2028 Contribution Hike Looms

Officials warn system rules will lift rates from 2028 unless the draft changes before the December vote.

Overview

  • Deutsche Rentenversicherung chief Alexander Gunkel projects the contribution rate will rise from 18.6% to 19.8% in 2028, with further increases indicated to 20.0% in 2029 and 21.2% by 2037.
  • He cites a shrinking sustainability reserve and a planned increase in the minimum reserve to 0.3 months as triggers and urges cost-sharing between the federal budget and contributors.
  • The Junge Union unveils a platform demanding a contribution moratorium for the current term and a formula tying the retirement age to life expectancy starting in 2031.
  • A group of 32 business associations has warned parliamentary leaders that the government’s pension package is “untragbar” and “nicht finanzierbar.”
  • Reports highlight rising costs, including a projected 26% jump in pension spending to about €457 billion by 2030 and an estimated €115 billion in extra outlays from 2032 to 2040, with example calculations showing about €216 more per year for an employee earning €3,000 gross if rates rise in 2028.