Germany's Chancellor Merz Pledges Pension Reform Overhaul

Chancellor Friedrich Merz vowed on Tuesday to persuade his ideologically divided coalition to overhaul Germany’s pension system in the second half of the year.

“We need to move quickly, because the problems we face cannot be put off,” Merz told reporters in Berlin after an expert commission of academics and lawmakers presented 33 recommendations to reform Germany’s pension system, which has come under growing strain as the baby boomer generation retires.

“We’re actually already very late. We should have done all of this many, many years ago ... I want us to get this moving very quickly now and to make the decisions necessary to implement this reform in the second half of the year,” Merz added.

Among the 33 proposals — all of which Merz promised to implement rapidly — are a mandatory capital-funded pension savings scheme modeled on the Swedish system and a link between the retirement age and average life expectancy, under which the retirement age would rise by about six months each decade from 2032.

“The retirement age will be 70 years old starting in 2092 at the earliest,” a summary of the report reads.

The reform is one of a series of urgent, long-delayed measures — spanning tax policy, pensions and long-term care insurance — that Merz and the leaders of his conservative-led government have vowed to agree on in the coming weeks. The aim is to show that the unpopular and at times fractious coalition remains capable of governing as support for the Alternative for Germany (AfD), a far-right opposition party, continues to grow.

Bärbel Bas, a leader of the center-left Social Democratic Party (SPD), which governs in coalition with Merz’s conservatives, also pledged swift implementation of the commission’s recommendations. She argued that the proposals formed a comprehensive package and that individual measures could not be cherry-picked to suit ideological preferences.

“I want to make it clear here: I want to implement this package,” Bas, who is also labor minister and thus responsible for the file, said alongside Merz. “To do so, we will certainly need to get the support of the parliamentary groups within our own ranks. That’s important because, in the end, it has to be approved by the German Bundestag.”