(de-news.net) – A comprehensive reform of the pension system is deemed unavoidable. This assessment is based on a policy paper authored by a group of economists led by Prof. Dr. Marcel Thum, Director of the Ifo Institute in Dresden, and Prof. Dr. Martin Werding, member of the German Council of Economic Experts.

The economists propose four major changes: the abolition of early retirement at 63, the linkage of the retirement age to life expectancy, an enhancement of the sustainability factor, and an inflation-based adjustment of existing pensions. Failure to implement these measures is expected to result in a continuous rise in the contribution rate, which would entail serious repercussions for employees and businesses alike. The report also notes that difficult decisions have consistently been deferred, thereby aggravating the underlying problem.