With the aim of ensuring the stability of the statutory pension system, a major reform is looming in Germany that could fundamentally change the way people retire.

After the adoption of the pension package, the federal government is considering introducing a model where the key factor for retirement would be the minimum number of years of paid contributions, rather than a fixed retirement age.

Labour Minister Bärbel Bas warned that 'bold' decisions are necessary, stressing that cosmetic changes alone will not be enough, but that a completely new system is needed, writes Fenix Magazin. The new Pension Commission will discuss making age no longer decisive in the future (currently being gradually raised to 67 by 2031), but exclusively the length of working life.

Years of service as the new lever of the system

According to the currently valid rule, only those with 45 years of service can retire at 65 without reductions. The new model envisages that the number of years worked, for example 45, would be decisive for entering retirement.

Economic expert Jens Südekum, adviser to Social Democratic Finance Minister Lars Klingbeil, supports this approach. He believes that working life is the lever that must be acted upon in order to ensure the stability of the pension system.

Minister Bas confirmed openness to such a model on the programme 'Bericht aus Berlin'. This would mean that people who start working early, such as tradespeople, could stop working earlier, making these professions more attractive. On the other hand, academics, who enter the labour market later, would have to work longer, perhaps even until the age of 70, or accept pension reductions. This perspective is already causing concern among part of the public, who ask: 'What will I do after the age of 70!?'

Chancellor Merz also supports this idea, stating to ARD that the duration of pension payments should be in a better ratio to the period during which contributions were paid into the system.