Germany’s Chancellor Friedrich Merz at a press conference to hand over the report of the Old Age Security Commission.Image: www.imago-images.de
In Germany, a commission has presented 33 proposals for pension reform – and Chancellor Friedrich Merz has announced their full implementation.
June 23, 2026, 11:02 amJune 23, 2026, 11:02 am
“All elements of this reform package must now be implemented quickly,” said Merz after handing over the report in Berlin. One cannot afford to remove or reject individual measures.
The measures would interlock and balance each other out. “They form an overall concept that only works as a whole,” said the head of government. The coalition of Christian and Social Democrats therefore agreed to implement the package “fully”. For the government that has been in office for over a year, the reform is a central project with which it not only wants to keep pensions stable, but also show the ability to act and improve the mood in the country.
The pension commission with 13 experts and politicians was set up six months ago to make proposals for a major pension reform.
33 Commission proposals
The Commission’s key recommendations include:
- Introduction of a “capital pension”: It is intended to stabilize the pension level. To achieve this, the pension contribution paid equally by employees and employers would be increased by up to two percentage points. This would be in addition to an already expected increase in the contribution rate of currently 18.6 percent of gross wages. According to forecasts, by 2028 it will already be 19.9 percent.
- Reintroduction of the “sustainability factor”: According to the Commission’s proposals, it should take effect again from 2031 and curb the annual pension increase. In the medium term, the capital pension should compensate for this. For people who are already close to retirement age, a “transition factor” is provided that keeps the pension level close to 48 percent.
- Increasing the statutory retirement age: It should continue to rise in small steps over the next few decades beyond 67, linked to life expectancy.
- Restriction of early retirement: The early pension without deductions for people with at least 45 years of employment should be abolished. Even with discounts, you shouldn’t be able to retire before 64.
- Expansion of contributors: In the future, self-employed people and politicians, but not civil servants, should be included in the statutory pension.
“Balanced package”
Merz praised the proposals as a “balanced package”. “These recommendations are of the utmost importance,” said the chairman of the Christian Democratic CDU. The proposals could reverse the trend and lead to pension levels rising and contributions falling.
Merz promised: There will be no cuts in pension benefits. So far only small corrections have been made to the pension system, this is now a major reform. «It is high time. Doing nothing is not an option,” said Merz. (sda/dpa)