DIW: Union pension proposal would heavily disadvantage women

A study by the German Institute for Economic Research (DIW) suggests that a pension reform proposal from the Union political group would disproportionately affect women. The proposal, discussed by CDU parliamentary group leader Thorsten Frei, involves restricting early retirement eligibility to only include years of active employment.

Currently, periods of childcare, unemployment, and family care are credited toward the 45 years required for early retirement. Because women disproportionately accumulate these non-employment periods, the DIW calculates that 52.1 percent of women in the studied 1958 birth cohort would lose their eligibility for early retirement under this plan, compared to a negligible 0.5 percent decrease for men.

The DIW also noted that the reform would have a relatively limited impact on cost savings, reducing expenses by approximately 20.6 percent. An alternative being discussed in politics involves raising the threshold for early retirement from 45 to 47 insurance years, which would also disadvantage women, though the financial impact would be greater than the proposed changes to childcare and caregiving credits.