The German government is pressing ahead with a major pension reform, German Chancellor Friedrich Merz confirmed on Tuesday.
Merz announced that all 33 proposals submitted by the pension commission, established six months ago, will be implemented in full. “Doing nothing is not an option,” said Merz. “We must act now.”
The package will be adopted as a whole, according to German Labour Minister Bärbal Bas, who stated, “Picking and choosing specific measures is not an option.”
Among the reforms, employees and employers will contribute an additional 2% of their gross wages to a state fund, which will be invested in the capital market. The aim is to ensure long-term affordability of pensions.
The statutory retirement age will gradually be raised beyond 67 years over the coming decades, linked to life expectancy.
The current provision for early retirement after 45 years of employment will be abolished, making 64 the minimum retirement age for Germans.
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