(de-news.net) – The proposed elimination of retirement without deductions after 45 years of contributions has revealed deep divisions among German state premiers and within the governing coalition, as steps are taken towards a pension reform. Opponents concentrate on physically taxing jobs, regional disparities, and safeguards for established retirement plans, while supporters highlight demographic sustainability and intergenerational equity.
Thorsten Frei (CDU), leader of the Union parliamentary group, is pressing for full implementation of the proposed pension reform, arguing that its individual provisions should be understood as parts of a broader package. Rather than placing most of the burden of demographic change on younger people, Frei described the pension commission’s recommendations as an integrated approach designed to distribute those effects across generations. If the package successfully passes through the legislative process, he argued, it could amount to a fundamental, generational reform of Germany’s pension system. Because the need to make the country’s social security systems financially sustainable has been evident for years, Frei said implementation should begin without delay.
Sven Schulze, the Prime Minister of Saxony-Anhalt, remains at odds with Chancellor Friedrich Merz (CDU) over the future of the so-called “retirement at 63” provision. While the pension commission has recommended ending the arrangement, Schulze continues to defend the possibility of retiring without deductions after 45 years of contributions. His position represents a reversal on one important element of the commission’s package: In June, he had praised its recommendations as a means of making pensions more sustainable, but he has since rejected the proposed abolition of the 45-year provision.
For Schulze, the question carries particular weight in eastern Germany, where many workers have spent decades in physically demanding occupations and may have limited ability to extend their working lives. He has made clear that he does not seek to derail the broader reform and remains willing to compromise, but he also intends to maintain his position on the retirement rule. The dispute illustrates the difficulty of applying a uniform pension policy to workers whose employment histories and working conditions can differ substantially across regions.
Schulze has also criticized federal political disputes for complicating the CDU’s campaign in Saxony-Anhalt ahead of the state election. National controversies over personnel and political positioning, he said, had displaced regional issues at campaign events even though those matters were largely beyond the state party’s control. In his view, the role of a minister-president is not to ensure that Berlin’s priorities dominate in Saxony-Anhalt, but to bring the state’s concerns to the federal capital and seek to have them reflected in national policy.
Labor Minister Bärbel Bas (SPD) has indicated that she would support a transition period of about five years if retirement after 45 years of contributions is ultimately eliminated. Such a period, together with legal protections for existing expectations, would give employees time to adjust their financial and professional plans to the new rules. Bas has also stressed that the SPD would not automatically oppose retaining the provision if the CDU and CSU ultimately decided to preserve it. Keeping the arrangement, however, would carry substantial financial costs, which she said would need to be recognized.
At the same time, Bas has cautioned against dismantling the pension commission’s recommendations on a provision-by-provision basis. The commission proposed 33 measures intended to stabilize retirement provision across generations, and Bas argued that rejecting individual elements could make it harder to achieve a comprehensive settlement. Without structural changes, she said, contribution rates would rise while pension benefits declined, leaving both younger and older generations worse off. The central issue, in her assessment, is therefore not simply whether one provision survives, but whether Germany can produce a sustainable pension system as a whole.
Among the measures expected to be introduced in the fall are improvements to disability pensions and the proposed new occupational-disability pension. A separate plan to strengthen statutory pensions through additional contributions that would be invested for returns is expected in early 2027. Bas has also emphasized that workers who have completed long careers but can no longer remain employed because of health problems should retain the possibility of retiring two years early without deductions. Preventive measures and rehabilitation would therefore remain important alongside the pension changes, while transitional arrangements and protections for existing expectations would help workers adjust to the new framework.
The disagreement over retirement at 63 has also added pressure within the governing coalition. Dennis Radtke, federal chairman of the Christian Democratic Employees’ Association, sharply criticized the SPD’s growing resistance to ending the provision. Rather than using the dispute to question the broader reform, he argued, the SPD should seek practical transition rules and protections for workers in particularly demanding occupations through the legislative process. In a period when Germany is under economic pressure and the political center is facing significant strain, Radtke viewed internal hesitation and what he characterized as uncoordinated political responses as damaging to the coalition’s ability to deliver reform.
Debate pits worker protections against demographic pressures
Dirk Wiese, parliamentary manager for the SPD, said detailed negotiations with the CDU and CSU should begin once the concrete pension bills are available. In connection with the proposed retirement age of 64.5, he identified hardship provisions and protections for reasonable expectations as particularly important issues for lawmakers to address. The emphasis on these safeguards reflects the coalition’s broader challenge of reconciling structural reform with the circumstances of workers who have already planned their retirement around existing rules.
Economist Marcel Fratzscher, president of the German Institute for Economic Research, has taken a considerably more critical position on retirement without deductions after 45 years. He argued that there was little justification for granting an additional benefit to workers who had completed that contribution period, characterizing the provision as a costly redistribution from younger to older people and, comparatively, from lower- to higher-income groups. From that perspective, the central concern is not only the cost of earlier retirement but also who benefits from the arrangement and who ultimately finances it.
Steffen Kampeter, managing director of the Confederation of German Employers’ Associations, has likewise urged both coalition partners to proceed with the reforms they have promised. His appeal reflects concerns that continued disagreement could weaken confidence in the government’s ability to carry out its pension agenda. The dispute over a single retirement provision has consequently become part of a wider test of whether the governing parties can maintain a common position on a reform with long-term consequences.
Manuela Schwesig (SPD), the Prime Minister of Mecklenburg-Western Pomerania, has also rejected further increases in the effective retirement age. She has consistently opposed eliminating the option of retiring without deductions after 45 years of contributions and maintains that opposition to the proposal now crosses both party and regional lines. Several other state premiers, she has noted, share concerns about the change. Schwesig argues that the provision should be assessed in light of actual contribution histories: Those who complete 45 years have already spent considerably longer paying into the pension system than the average worker, whose contribution period is shorter.
The consequences for people in physically demanding occupations form the core of Schwesig’s objection. A worker who begins training at 16 and subsequently spends decades in occupations such as welding, shipbuilding or electrical work, including employment involving shifts, could reach 61 after completing 45 years of contributions. Abolishing the current provision could therefore require such workers to remain employed for several additional years. Schwesig considers that prospect particularly difficult to reconcile with the physical demands of these occupations. She has also argued that family caregivers, especially women who care for young children or elderly relatives, should not lose pension benefits because of unpaid work that simultaneously reduces pressure on the wider social system.
Economist Monika Schnitzer takes the opposite view and has urged the government to maintain its plan to eliminate retirement at 63 despite political resistance. She argues that the provision is used disproportionately by relatively healthy workers who then receive pension payments for longer periods, with the associated costs borne by contributors. In her analysis, the resulting incentives place a particular burden on younger generations, raising the broader question of how retirement benefits should be financed as demographic conditions change.
Schnitzer considers structural pension reform long overdue and argues that previous adjustments have largely increased the system’s costs. She supports eliminating benefits that are not directly tied to insurance contributions while also advocating a greater role for funded retirement savings. With Germany’s population declining, she argues, increasing pressure will fall on the pay-as-you-go system, making additional forms of retirement financing increasingly necessary. The dispute over retirement at 63 thus reflects a broader disagreement about how Germany should distribute the financial and social consequences of demographic change—and about how far existing retirement promises should be preserved as the population and labor force evolve.
