“This is overdue” – CSU announces higher deductions for early retirement

Employees who want to retire early could face higher financial losses. The federal government plans to increase the deductions for early retirement from the current 0.3 to 0.4 percent per month. CSU regional group leader Alexander Hoffmann told the editorial network Germany (RND). “This is long overdue,” he explained. An increase to 0.5 percent was also discussed for a long time. Now it will remain legally secured at 0.4 percent.

If possible, the new regulation should take effect as early as the 2027 financial year. The Federal Ministry of Labor will present a concrete proposal for a timetable, said Hoffmann. The previous discounts have been in effect since the mid-1990s and have not been changed since then.

The background is planned cuts in federal subsidies for pension insurance. These are expected to fall by three billion euros in 2027 instead of one billion euros as originally planned. The higher deductions are intended to offset some of these cuts. At the same time, the coalition wants to prevent pension contributions from rising more than previously forecast. An increase in the contribution rate from the current 18.6 to 19.7 percent is expected for 2028.

Retirement at 63 is a “design flaw”

But Hoffmann is calling for further cuts. In the dispute over the pension without deductions after 45 years of insurance, he is demanding fundamental reforms from the SPD. The so-called pension at 63 is a “design flaw in the pension system” that costs billions and does not specifically help those who actually need an early exit.

If the SPD wants to stick to the regulation, it would have to propose savings of the same magnitude elsewhere, said Hoffmann. The Social Democrats have so far rejected complete abolition. One possible compromise is that periods of unemployment benefit receipt will no longer be counted towards the 45 years of insurance in the future. The dispute is putting a strain on the planned pension reform.