German government debates transition period for abolition of “Rente mit 63”

The coalition government has agreed to scrap the “Rente mit 63”, which allows retirees with 45 contribution years to retire without penalties. The Rentenkommission recommends ending the discount‑free early pension and linking the statutory retirement age to life expectancy, gradually raising it to about 67.5 years by 2041 and potentially to 70 years in the 2090s.

Parliamentary debate now focuses on the length of a transition period for those already planning to retire early. SPD social‑policy spokesperson Annika Klose calls for a long grace period, proposing up to ten years; fellow SPD member Bernd Rützel also backs ten years. The Union and some economists argue for shorter periods: economist Martin Werding suggests one to three years, while Union member Pascal Reddig deems five years too long. Rentenkommission chair Constanze Janda says a transition is constitutionally required but does not specify its duration.

A DIW study cited by the commission showed that only 41 % of people born in 1957 would have reached the 45‑year contribution threshold, with far lower rates among low‑earners and women with children. The commission also rejected a proposal to base pensions solely on contribution years, citing equity concerns. The reform package includes a 0.3 % monthly pension reduction for early exits and a new hardship rule for heavily burdened occupations. A proposed capital‑funded supplement to the pension system has drawn criticism from left‑wing politicians.