Germany's pension commission proposes raising retirement age and ending Minijobs

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2 months · 3 summary articles
Germanys ruling coalition adopts full Rentenkommission pension reform package
Follow-upGermany's pension commission proposes raising retirement age and ending Minijobs
Germany's pension commission proposes raising retirement age to 64 and boosting replacement rate to 70
Follow-up
Germany’s Rentenkommission delivered its long-awaited reform blueprint on Monday, 22 June 2026, proposing a sweeping overhaul that would raise the statutory retirement age, introduce a capital-funded pillar, and phase out the €538-minimum-job exemption—measures Chancellor Friedrich Merz must now push through a fractious coalition or risk the collapse of his reform agenda.
The 76-page report, obtained by *WELT* , recommends linking the retirement age to life expectancy after 2035, effectively ending the option of early retirement without deductions. Contribution rates would climb by 0.3 percentage points in 2027, rising to 20.5 % by 2032, while a new “capital pension” would redirect 2 % of gross wages into private equity and bond markets, aiming to stabilise the pay-as-you-go system. The commission also calls for the abolition of Minijobs—currently held by 6.8 million workers—arguing that the exemption undermines long-term pension contributions.
Reactions split sharply along political lines. Youth wing leader Carsten Linnemann (CDU) told the *FAZ* podcast that the package could become the government’s “Undav moment,” echoing the 2023 coalition crisis that toppled the Scholz administration . SPD labour-market spokeswoman Annika Klose, a left-wing rebel, is negotiating the compromise with the Union, while Juso leader Jessica Törmänen branded the life-expectancy link “socially unjust” and warned it would hit low-income earners hardest .
Employers’ associations immediately criticised the capital-pension proposal. The Federation of German Employers’ Associations (BDA) argued in the *Handelsblatt* that mandatory market exposure would expose workers to volatility and called for voluntary opt-in instead . Ifo Institute president Clemens Fuest, quoted by *WELT*, labelled the overall package “unbalanced,” while Tübingen mayor Boris Palmer (independent) and Finance Minister Lars Klingbeil (SPD) praised its ambition .
The political stakes are existential for Merz. *Der Standard* editorialised that the chancellor’s legacy as a “Reformkanzler” now hinges on whether he can broker a deal before the summer recess . The commission’s chair, economics professor Lars Feld, struck a cautiously optimistic note in a *Handelsblatt* guest column, calling the proposals a “good job” that opens pathways to consensus—though he cautioned that the final design must avoid overburdening younger cohorts .
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