Germany's pension reform plan faces cautious stance on minijobs

The coalition government led by Chancellor Friedrich Merz has presented a sweeping pension‑reform package that includes raising the statutory retirement age, introducing a mandatory capitalisation pillar alongside the existing redistribution system, and tightening rules on early retirement. A 13‑member expert panel submitted 33 proposals, with Labour Minister Bärbel Bas calling the report an "art work". The new capitalisation element would invest part of pension contributions in equity markets, starting at 0.5% of gross wages in 2028 and rising to 2% by 2032, split equally between employees and employers, and is expected to yield 3‑5% annual returns to help stabilise pensions after 2040.

Bavarian CSU leader Markus Söder voiced support for the overall reform but warned against abolishing minijobs, saying any changes must not cause damage that later requires reversal. He also opposed extending the statutory pension scheme to civil servants and called for a cost‑sharing formula that would keep at least 75% of federal‑level expenses with the federal government, protecting municipalities that are already near their fiscal limits.