Union Demands Hardship-Based Flexible Retirement as Expert Panel Targets ‘Pension at 63’

Thousands of construction workers over 63 are practically invisible in German building sites — and that number is the ammunition a major union is using to fight a commission’s call to scrap early retirement.

The IG BAU trade union fired back on July 9, demanding a “Flexi-Rente” that ties retirement access to the physical strain of a job. The numbers illustrate why: in the Siegen-Wittgenstein district, only 150 of 3,670 construction workers are older than 63. In Halle, the figure drops to 80 out of 2,310 employees. The union wants an express lane to retirement for workers in hard-on-the-body occupations, a halt line of at least 48 percent for the pension level until 2031, and a long-term target of 53 percent.

The union’s push comes as the Alterssicherungskommission — Germany’s pension security commission — recommended abolishing the early-retirement option known as “Rente mit 63.” The commission, citing a fiscal and fairness imbalance, argued that the scheme has disproportionately benefited men and higher earners since its introduction in 2015. About 30 percent of new retirees have used the option. The average pension stood at €1,677 in 2025. The commission also flagged financial distortions for the statutory pension insurance system.

Research from the Institute for Work and Qualifications (IAQ) released on July 9 adds weight to the union’s argument. While employed people aged 58 to 65 are generally healthier than retirees of the same age, their overall health has deteriorated since 2010. Many workers are too sick to continue their jobs but fail to meet the tough criteria for a disability pension. IAQ researcher Brussig criticised the debate about raising the retirement age further, calling instead for investment in prevention and easier access to early retirement.

Business representatives are taking a different line. WKÖ President Schultz stressed on July 10 the importance of an “active pension” — flexible work models and tax breaks for partial pension receipt — to ease the skilled labour shortage and keep older employees voluntarily in the workforce longer while reducing old-age poverty.

A legal twist complicates the landscape. The Schleswig-Holstein Labour Court examined a case where a contract clause triggered automatic employment termination after an employee applied for a part-time pension of 99.99 percent. The employer interpreted that as the start of the pension event. The Federal Labour Court will now review the case under file number 7 AZR 210/25.

For civil servants in police, fire, and military, the transition from service to pension brings a shift in health coverage: free medical treatment ends, and pensioners must switch to a state subsidy (“Beihilfe”) covering roughly 70 percent of costs, leaving the remaining 30 percent to a private health insurance policy. Advisers recommend arranging an early insurance entitlement.

Beyond finance and law, the psychological dimension of leaving work is gaining attention. Counsellors urge early planning that goes beyond spreadsheets — key steps include turning professional contacts into private ones and building non-work activities. Research shows new retirees typically choose one of three paths: a clean break from work, continuing in a reduced role, or launching new projects.

The Frankfurt insurance office reported on July 9 a sharp rise in demand for information. An online seminar on the psychosocial side of career exit is scheduled for late October.

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