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Merz will launch pension reform this year

2026-02-03 18:33:00, Kosova & Bota CNA

In the coalition agreement between the conservatives and the Social Democrats, the German government set itself the following goal: "We will create a reliable pension system for all generations." To achieve this, Friedrich Merz believes that the pension system must be reformed and the German chancellor wants to speed up the process.

A "comprehensive pension reform" will begin this year.
This was announced by Friedrich Merz at the annual reception of the German Stock Exchange (Deutsche Börse) in Eschborn, near Frankfurt. His basic idea for the planned reform is that mandatory pension insurance should be retained, but should be only one element among others in a new comprehensive level of coverage. Private pension insurance and company pensions, which are financed on a capital basis, should play a much more important role than before, Merz emphasized, referring to an "imminent paradigm shift in German pension policy."

Pensions are a priority in social reforms
In an interview with the Tagesspiegel newspaper, the head of the chancellery, Thorsten Frei, also set the goal of launching the pension reform in 2026. "By the end of the year, we will have implemented the first major social reforms, and we have given priority to pensions," said the CDU politician. But it is also clear "that not everything will be ready by December." A pensions commission is currently examining possible proposals. It should present them by the end of the second quarter. According to Frei, some of these proposals can be implemented quite quickly, while others will require a longer preparatory period.

Last year, pensions were the subject of fierce controversy, even within the conservative unionist parties. The CDU's youth organization, Junge Union (JU), protested against the pension reform plans agreed between the unionist parties and the SPD and threatened to reject the legal package that had to be approved by the Bundestag before the end of 2025. In the end, the bill was passed, following a promise made to young people that a fundamental pension reform would be launched in 2026.

CDU-affiliated Economic Council calls for pension cuts
The CDU-affiliated Economic Council, a business association, recently presented proposals for reforming the pension system. In order to reduce federal spending, the Council proposed cutting the special pension for mothers and eliminating retirement at age 63. Instead, the retirement age should be linked "in the medium term" to life expectancy.

While the Economic Council's proposals were heavily criticized by all parties, they now have the support of economist Veronika Grimm. "We need proposals that reduce the burden on the federal budget, but also on the federal states and municipalities," she said on the joint ARD and ZDF morning show. Because compared to other European countries, the tax and social security burden has reached "record levels."

In the area of ??pension insurance, for example, the state has largely gone in the wrong direction, Grimm warned. And the billions planned for the coming years are putting even greater pressure on the federal budget. Therefore, raising the retirement age, she said, is an "important factor." Similarly, "retirement at 63 and the pension for mothers should actually be discussed."/DW