Germany May Raise Retirement Age and Launch State Pension Fund: Commission Proposals
Key Proposals and Implications for Germany's Pension System
Background: Addressing an Ageing Population and Public Finances
BERLIN, June 20 (Reuters) - Germany could increase its pension age and establish its own state pension fund under proposals by a government-appointed commission, sources familiar with the matter said on Saturday, as Europe's largest economy addresses an ageing population and creaking public finances.
Proposed Changes to Retirement Age
Incremental Increases Based on Life Expectancy
• The commission proposes incremental increases every decade according to life expectancy, rising to 70 by 2092 under its current calculations, the sources said
Current Retirement Age Law
• Under current German law, the nation's retirement age is set to reach 67 by the early 2030s
Additional Pension System Reforms
Abolishing Early Retirement Options
• The proposals also include abolishing the option of statutory early retirement from age 63 without deductions and establishing a Sweden-style pension fund, according to the sources
Establishing a State Pension Fund
Goals and Structure of the Pension Fund
• The goal of the fund, in which contributions backed by workers and their employers are invested in financial assets to pay future pensions, would be to stabilise pension levels and increase them from 2040
Next Steps
• The proposals are set to be presented to Chancellor Friedrich Merz on Tuesday
Reporting Credits
(Reporting by Holger Hansen, Writing by Rachel More, Editing by Rod Nickel)
