Berlin Rejects Employer Push to Scrap 45-Year Early Retirement Rule as Political Fight Intensifies
05.06.2026 - 03:16:39 | boerse-global.de
Germany’s ruling parties have pushed back against a fresh demand from employer associations to abolish the option for workers to retire without financial penalties after 45 years of contributions. The proposal, backed by a study from the German Institute for Economic Research (DIW) commissioned by the Bertelsmann Stiftung, has ignited a debate over costs, labour shortages, and social fairness.
Dagmar Schmidt, deputy chair of the SPD parliamentary group, dismissed the call outright. “This isn’t a privilege — it’s a matter of social justice,” she said, arguing that workers who have paid into the social security system for decades deserve an unreduced pension. The Left Party’s pension policy spokesperson, Sarah Vollath, added that the study’s headline figure represents just three percent of the annual pension outlay for the affected cohort, urging caution before using it as justification for cuts.
The employer offensive was led by Steffen Kampeter, managing director of the Confederation of German Employers’ Associations (BDA), who on Wednesday called the current rule a “costly error.” According to the DIW analysis, scrapping the provision would save the state roughly €9.5 billion per retiree cohort and keep around 125,000 additional full-time workers on the labour market. Kampeter argued that the regulation is robbing industry of urgently needed skilled labour.
The rule, often colloquially known as the “pension at 63,” was introduced in 2014. In reality, the minimum age is rising gradually: for those born in 1964 or later, the earliest possible unreduced retirement age is 65. Currently, the regular retirement age is 66 years and four months, with a deduction-free early retirement option available from 64 years and four months.
Each year, between 250,000 and 280,000 employees — roughly 30 percent of all new old-age pensions — take this route. The DIW economists calculated that without the option, the affected workers would stay in employment for an average of ten months longer.
The study modelled the financial effects for the 1957 birth cohort. It found that the statutory pension insurance would be relieved by €10.4 billion, but that tax and social security contributions would drop by €860 million due to altered retirement timing.
Should policymakers decide to eliminate the rule, the DIW and Bertelsmann Stiftung recommend accompanying hardship provisions. These could include mandatory health checks to assess work capacity, broader use of the reduced-earnings pension for those physically unable to continue, and special transition rules for workers in particularly demanding occupations.
Despite the political resistance, the BDA continues to push for a full repeal. Supporters of the current rule maintain that anyone who has paid contributions for 45 years should be able to retire without penalty. The debate is expected to intensify in the weeks ahead as the government examines ways to address both pension sustainability and labour market needs.
