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Germany Weighs Pension Shake-Up as Panel Debates Higher Retirement Age and Who Pays

A government commission now weighs options that balance sustainability with fairness before issuing recommendations by mid‑2026.

Overview

  • At focused sessions on Feb. 23–24, the Alterssicherungskommission examined raising the statutory age, including life‑expectancy links that could eventually reach 70.
  • The commission is weighing steeper deductions for early retirement and significantly larger bonuses for working beyond the standard age.
  • Economists diverge on pace: Martin Werding proposes a very gradual path that would only hit 70 by 2091, while Bernd Raffelhüschen urges a faster move starting around 2030 with tougher early‑exit penalties.
  • Expanding contributions to currently excluded groups is on the table, with a YouGov survey showing 62% support for widening the payer base as the dbb union warns bringing civil servants into the system would be costlier.
  • Parallel reforms under consideration include easing guarantees on state‑subsidised products to allow ETF‑style options, as the cabinet’s prior decision holds the pension level at 48% to 2031 with the contribution rate rising to 18.8% in 2027.