Germany's pension commission hands over 33 proposals as Merz and Bas pledge full adoption

A package presented as a 'Gesamtkunstwerk'

Chancellor Friedrich Merz (CDU) and Labour Minister Bärbel Bas (SPD) appeared together at the chancellery to receive the 33 recommendations of the pensions commission, delivered after more than 150 working sessions since January. Merz stated that the measures interlock and balance each other.

All elements of this reform package must now be implemented swiftly. They form an overall concept that only functions as a whole.

Bas added that there would be "no cherry-picking" and described the report as a "Gesamtkunstwerk" (total work of art). The commission's 13 members, a mix of politicians and external experts, reached a unanimous vote on all proposals.

The core proposals

The package aims to stabilise a system that currently consumes nearly €128 billion in federal subsidies, roughly a quarter of the federal budget. Key measures include linking the statutory retirement age beyond 67 to gains in life expectancy, which the commission calculates would raise it to 67.5 in 2041 and to 68 in 2051. The "pension at 63" for those with 45 contribution years would be abolished, and early retirement would not be possible before age 64, even with deductions.

A new capital-funded pillar (Kapitalrente) would be introduced, financed by a contribution increase of up to two percentage points, shared equally between employees and employers. The "sustainability factor" that dampens annual pension increases would be reactivated from 2031. The contributor base would be expanded to include the self-employed and politicians, though not civil servants for now. The target is a net replacement rate of at least 70% after taxes, combining statutory, occupational and private pensions.

Resistance from within the coalition

Despite the public unity, resistance emerged from the SPD's own ranks. Manuela Schwesig, Minister-President of Mecklenburg-Western Pomerania, told Der Tagesspiegel:

I am not of the Chancellor's opinion that these proposals must be adopted one-to-one.

She argued that the federal states and social partners were not involved in the commission's work and that such far-reaching decisions could not be taken "over their heads". She also insisted that newly hired civil servants should be included in the statutory system and defended the principle that 45 contribution years should still allow pension without deductions.

The Greens demand a firm floor

Green parliamentary leader Britta Haßelmann welcomed many recommendations but demanded that the pension level be locked at 48% for the statutory system.

The pension level must remain at 48% and be stabilised. Anything else would lead to even greater old-age poverty.

She highlighted that the average statutory pension for women in Germany is only €980 per month, with many people in eastern Germany relying exclusively on the state pension. The Greens have previously tabled their own proposals to reshape early retirement rules, and they support a capital-funded supplement.

Social organisations split

The Workers' Welfare Association (AWO) called the planned tightening of the retirement age "completely unacceptable," arguing it ignores the reality of many workers' lives and deepens inequality because life expectancy correlates with income. The Paritätische Gesamtverband praised the inclusion of self-employed and MPs but criticised the lack of concrete measures against old-age poverty. Caritas president Eva Welskop-Deffaa, by contrast, endorsed the package:

Only with a broad reform agenda cast from a single mould can our pension insurance keep its performance promise tomorrow and the day after.

The German Bishops' Conference also voiced approval, according to Der Tagesspiegel.

What happens next

The coalition committee will meet on 1 July, where Bas expects "political commitment" to the full package. First legislative decisions are planned for the autumn. Whether the government can maintain the discipline Merz and Bas projected depends on whether the SPD's internal critics and the Greens can be brought on board without diluting the plan.