The commission, whose proposals are set to be presented to Friedrich Merz, the German chancellor, on Tuesday, has suggested incremental increases to the pension age every decade according to \u200clife \u200cexpectancy, rising to 70 by 2092<\/a> under its current calculations.<\/p>\n They propose a 2:1 ratio formula. For every additional year of statistical life expectancy gained by the population, eight months must be spent working and four months can be spent in retirement.<\/p>\n Mr Merz’s fractious coalition want to cut government spending amid low economic growth – Daniel Gnap\/NurPhoto\/Shutterstock<\/p>\n It also recommends the creation of a state pension fund. The fund, made up of contributions from workers ​and their employers, would be invested in financial ​assets to pay future pensions.<\/p>\n Currently, Germany has a mandatory state pension system known as the Gesetzliche Rentenversicherung. It is a pay-as-you-go system, meaning the contributions taken from current workers directly fund the pensions of current retirees.<\/p>\n Mr Merz’s fractious coalition<\/a> between his conservative Christian Democrats and the centre-Left Social Democrats (SPD) wants to reform Germany’s ailing economy and cut government spending amid low economic growth.<\/p>\n As well as pensions, they are planning reforms to the labour market and income tax.<\/p>\n “We want to reform our country in such a way that future generations, young generations, also have the opportunity to live in freedom, in peace and in prosperity,” said Mr Merz last week.<\/p>\n Under the current German law, the nation’s retirement age is set to reach 67 by the early 2030s.<\/p>\n Martin Blessing, Mr Merz’s investment adviser, described the pension reform as “a kind of litmus test”.<\/p>\n “It would send an important signal that we can achieve major structural changes across party lines,” he told the Handelsblatt business magazine.<\/p>\n The proposals also include abolishing \u200cthe option of statutory early retirement from age 63 without deductions.<\/p>\n The commission also wants to reduce the number of gold-plated civil servant pensioners who receive an average of more than \u20ac40,000 (\u00a335,000) a year. A recent calculation by Welt newspaper found the annual cost of these pensions, which teachers in many states can access, to be \u20ac67bn (\u00a358bn).<\/p>\n Opposition figures criticised the proposals, with Sarah Vollath, the Left Party’s pension spokesman, warning: “These cuts will hit low-income earners particularly hard, the people who work tirelessly to maintain our prosperity.<\/p>\n “Even now, many people are unable to work until age 67. Now the pension commission wants to extend working life even further.”<\/p>\n ‘Absolutely absurd’<\/p>\n She described the proposal as “absolutely absurd” in the Rheinische Post newspaper.<\/p>\n “We reject any attempts to weaken the statutory pension,” Andreas Audretsch, the Green Party parliamentary group vice-chairman, told the AFP news agency.<\/p>\n The SPD’s representative on the commission defended it as being run by technical experts in a way that is “always fair and factually orientated”.<\/p>\n However, a top German economic analyst warned the proposals “lack courage and consistency”.<\/p>\n Marcel Fratzscher, head of the German Institute for Economic Research, said: “The reform proposals lack courage and consistency, as they do not change anything fundamental in the three biggest problems: high poverty levels in old age, a too-heavy burden on the young generation and the imbalance in equity.”<\/p>\n Far from raising their state pension age, the French hold the distinction of being one of the only European countries to have reduced it.<\/p>\n In 1982, as part of a radical Left-wing agenda, Fran\u00e7ois Mitterrand, the president at the time, decided that it should fall from 65 to 60.<\/p>\n France now has one of Europe’s lowest retirement ages at just 62, and hands almost 15 per cent<\/a> of its GDP to pensioners.<\/p>\n Faced with an unsustainable bill, politicians decided something finally had to give. In 2023, Emmanuel Macron, the French president, passed reforms to increase the age<\/a> to 64, using a constitutional clause to avoid a vote in parliament.<\/p>\n![\"Merz\"](\"https:\/\/www.europesays.com\/germany\/wp-content\/uploads\/2026\/06\/https:\/\/media.zenfs.com\/en\/the_telegraph_258\/2111cd7a2bf2ce472cc67172aff402a4.jpeg\"\/)
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