Germany Raises Part-Time Retirement Threshold to 58 as Shrinking Workforce Forces Policy Shift
28.06.2026 - 10:47:14 | boerse-global.de
Germany’s working-age population is contracting faster than new entrants can replace departing baby boomers, yet many employers still screen out candidates over 60. The contradiction is pushing the government to adjust retirement-transition rules and prompting fresh debate about age discrimination in hiring.
The federal Commission for Old-Age Security recommended Tuesday that the minimum age for Altersteilzeit—a popular part-time retirement scheme—should rise from 55 to 58. Under the proposal, the so-called block model, under which employees work full-time for half the period and take the other half off, would be eliminated. Data from the Institute for Employment Research (IAB) shows that between 2009 and 2018 roughly 82 percent of all concluded Altersteilzeit arrangements used that model. Chancellor Merz’s government intends to implement the recommendations.
Demographic pressure drives the rethink. Enzo Weber of the IAB reported Friday that the labor market is shrinking. The IAB Employment Barometer’s employment component dipped below 100, signaling weakening momentum. With the baby boomer generation retiring and too few younger workers coming through, numerous vacancies remain unfilled.
Experts argue that companies must retain older employees longer. Matthias Kempf, president of the Federal Association of HR Managers (BPM), stressed that businesses need to systematically leverage the experience of older staff. The Regensburg Chamber of Industry and Commerce points to specific advantages: a pronounced work ethic, high loyalty, and risk competence.
Mathias Möreke, former deputy works council chairman at Volkswagen, warned on Sunday about the consequences of age discrimination—even as the government explicitly promotes longer working lives. A study by the IMK and WSI released Friday warned that the planned capital pension could cost up to 250,000 jobs by the early 2030s. Sebastian Dullien of IMK cautioned that rising contribution rates would impose a dual burden on working people.
While the retirement transition is being reformed, technological developments complicate job seeking for all ages. James Reed, CEO of Reed Recruitment, explained Sunday that AI-generated application materials are flooding HR departments, making applications more interchangeable. A LinkedIn study this year found that the number of applicants per vacancy has doubled since 2022. About 65 percent of workers now find job hunting harder, yet 93 percent of recruiters plan to expand their use of AI.
One innovative response comes from the UK: discount retailer Lidl launched a project Saturday guaranteeing interviews for entry-level positions to applicants unemployed for at least six months.
Legal clarity on discrimination is also evolving. On 7 May, the Federal Court of Justice (BGH) heard the case of a blind woman denied admission to a rehabilitation clinic. The court is examining whether the General Equal Treatment Act applies. Meanwhile, the Federal Labor Court (BAG) ruled Thursday that minor errors in a mass-dismissal notification—such as a slightly inflated headcount—do not automatically invalidate dismissals, provided the Federal Employment Agency’s tasks are not impaired. Already on 19 March, the BAG had made clear that dismissals without a proper notification are fundamentally void and cannot be retroactively corrected.
The German Trade Union Federation (DGB) demanded Sunday that the pension level be stabilized at 50 percent, later at 53 percent. It rejects linking the retirement age to life expectancy. Peter Bofinger, a member of the pension commission, warned of constitutional hurdles to integrating civil servants into the statutory pension system.
