The government’s proposals for an “active pension” are facing sharp criticism from both trade unions and employers. Steffen Kampeter, Managing Director of the Confederation of German Employers’ Associations (BDA), told the Redaktionsnetzwerk Deutschland (Sunday editions) that the plan to incentivise longer working periods is undermined by the continued provision for penalty-free early retirement. He stated, “The government is pressing the accelerator and the brakes at the same time. This is ineffective in terms of incentive and expensive for contributors and taxpayers.
Anja Piel, board member of the German Trade Union Confederation (DGB) and simultaneously President of the German Pension Insurance Fund, echoed this sentiment, asserting to RND that the regulation would cost billions without resolving any existing issues. According to Piel, the decision for individuals to cease working after entering retirement is frequently attributable to health concerns, unsatisfactory working conditions, or a lack of employer willingness to retain them.
Piel advocated for targeted measures that would benefit everyone, rather than blanket tax advantages for a limited number of individuals. She suggested actions such as improving working conditions to enable healthy continuation of work until the age of 65, providing age-appropriate employment opportunities and facilitating pathways for women transitioning out of involuntary part-time work. “These would be the right answers to demographic change” she stated.
The government’s plans involve allowing pensioners to earn up to €2,000 per month (€24,000 annually) tax-free. Conservative party leader Friedrich Merz has indicated a potential implementation of the active pension system as early as the beginning of 2026.