Overview
- A 13‑member federal commission finalised about 30–33 recommendations and plans to hand the report to Chancellor Friedrich Merz and Labour Minister Bärbel Bas on Tuesday.
- The commission proposes tying the statutory retirement age to life expectancy so the rule age rises gradually (the models point to about 67.5 in 2041 and 68 in 2051) and recommends abolishing the early, unconditional ‘Rente mit 63’ while keeping transition protections for those close to retirement.
- It calls for a new, mandatory capital‑funded pillar that would start small (around 0.5–1 percent of gross wages) and phase up to roughly 2 percent, split between employers and employees and managed publicly to build equity returns over decades.
- The report would reintroduce the ‘Nachhaltigkeitsfaktor’ (a sustainability adjustment that slows annual indexation to reflect contributor numbers) from around 2031–2032, and it proposes widening the contributor base by bringing in many self‑employed people, politicians and limiting contribution‑free Minijobs.
- The package has drawn sharp criticism from unions and left opposition for increasing work years and risks for workers, while some economists back parts of it; adoption will require coalition agreement and could raise near‑term costs for current workers as planned 2028 contribution increases remain and new capital contributions begin to phase in.