The proposal by Labour Minister Bärbel Bas to link retirement age to years of contributions has drawn sharp criticism from economic advisor Martin Werding, who argues it fails to address the fundamental challenges facing Germany’s pension system. In an interview with “Handelsblatt”, Werding dismissed the suggestion as a superficially appealing maneuver that lacks substantive impact on the system’s long-term stability.
“The concept is not novel and its precision is questionable” Werding stated. “While it may sound like a worthwhile adjustment to the standard retirement age, it remains unclear how it will contribute to the overall solvency of the pension system.
Crucially, Werding highlights that the proposed linkage would not push back the overall retirement age, thereby precluding significant cost savings. Instead, it risks creating a system where high-earning professionals, predominantly men, are able to retire earlier than others who may not require such an advantage. He drew parallels with the existing “Rente mit 63” scheme – allowing early retirement with 45 years of contributions – noting that its purported benefits are often overstated and largely favor a select group of skilled workers, effectively functioning as a “golden handshake” for a professional elite.
Furthermore, the proposal is criticized for failing to provide relief for individuals facing particularly difficult circumstances, such as those whose working lives are significantly impacted by illness and who are unable to accumulate a full contribution history. This inherent flaw undermines the system’s stated aim of providing for those most in need of support.
Beyond the equity concerns, Werding cautioned that the linkage could also have unintended consequences for workforce development. By prioritizing contribution years over lifespan, it risks diminishing the incentive for pursuing higher education and specialized training, potentially stifling innovation and economic growth. The current framework rewards those who invest time in education with a more robust pension; this principle, he argues, should not be eroded. The implications for Germany’s future workforce and its competitiveness on the global stage warrant significant reconsideration of this policy direction.