CDU Economic Council Critiques Union’s Proposed “Active Pension” Plan
The CDU Economic Council has issued a sharp critique of the coalition’s plans, spearheaded by the Union, to introduce a so-called “active pension” scheme for retirees. According to a discussion paper released by the council, approximately 75,000 retirees would need to be incentivized to re-enter the workforce to offset the anticipated fiscal impact, potentially through increased revenue from corporate taxation.
However, calculations by the ZEW economic research institute suggest a significantly lower impact, estimating that the plan would only activate up to 15,000 retirees.
The Economic Council voiced concerns that the active pension scheme may disproportionately benefit the “wrong” workers, rather than those genuinely needed in the labor market. The organization argues that addressing existing early retirement incentives should be prioritized, stating that it is illogical to incentivize early retirement with financial benefits and then simultaneously implement measures to encourage re-employment.
While generally supportive of initiatives that encourage participation in the workforce at older ages, the council emphasized the need for a cohesive and effective approach. CDU General Secretary Wolfgang Steiger stated before the coalition committee that any measures must genuinely benefit willing workers, particularly given the current budgetary constraints. He stressed that only initiatives capable of stimulating economic growth are justifiable.
The coalition’s plan involves tax benefits for retirees who continue to work, allowing them to earn up to €2,000 per month tax-free. The aim is to alleviate the shortage of skilled workers. The coalition intends to implement the active pension scheme and other measures to support workers in the near future. The CDU Economic Council is a Brussels-based interest group with 12,000 members closely aligned with the CDU party.