The proposal to decouple the German retirement age from chronological age and instead link it to years of contributions is generating considerable controversy and facing sharp criticism from leading economists. Marcel Fratzscher, President of the prestigious German Institute for Economic Research (DIW), has labelled the concept as inherently unjust, warning of a significant exacerbation of existing inequalities within the pension system.
The suggestion, championed recently by economist Jens Südekum, who also advises Finance Minister Lars Klingbeil of the SPD, aims to address concerns about retirement equity. However, Fratzscher argues it would fundamentally shift the balance, creating a system where wealth is redistributed “from” those with fewer years of employment “to” those with more. He specifically cites the existing early retirement scheme at 63, which primarily benefits male industrial workers – often in higher-paying roles – as a current example of this skewed dynamic.
“This model will not reduce age-related poverty, but instead will amplify inequalities” Fratzscher stated in an interview with the “Rheinische Post”. He voiced concerns that the proposed system risks further marginalizing women and individuals who have historically undertaken unpaid work, such as volunteering or childcare. These individuals, often lacking the extensive contribution years needed to benefit, would be disproportionately disadvantaged.
The debate highlights a deeper political fault line within Germany’s approach to pension reform. While the justification often centers on fairness and incentivizing longer working lives, economists like Fratzscher are questioning whether the proposed solution inadvertently reinforces existing systemic biases. The potential for protracted and acrimonious debate surrounding the legitimacy of differing retirement ages – and who gets to define that legitimacy – is also a significant worry, creating further political instability surrounding a vital social safety net. The proposal’s ramifications extend beyond mere economic calculations, raising fundamental questions about the value placed on diverse forms of societal contribution.