“Anyone who has paid contributions for 45 years has paid enough. We will not abandon this principle.” The statement sounds like a trade union slogan. Yet it was signed by three leaders of the CDU, Chancellor Friedrich Merz’s party. Michael Kretschmer, Sven Schulze and Mario Voigt, the leaders of Saxony, Saxony-Anhalt and Thuringia respectively, are challenging one of the cornerstones of the German pension compromise: the abolition of the full pension without any reduction after 45 years of contributions. This option is commonly referred to as the ‘retirement at 63’ scheme, although the name has become misleading: the age at which it can be claimed has already been gradually raised and is now approaching 65 for the generations concerned.

The rift emerged just a few weeks after a commission of experts presented its 33 recommendations. The coalition comprising the CDU, CSU and SPD had accepted the general principle behind them. The aim was to ensure that the right to retire without a reduction in pension benefits was no longer determined solely by the length of contribution, but also by the age reached.

The agreement was intended to send a message of consistency. It paves the way for new negotiations.

Long working lives versus demographic trends

Opponents of the abolition advocate an intuitive concept of fairness. Someone who started working at the age of 17 or 18 and paid contributions for 45 years should not be treated in the same way as someone who entered the labour market much later.

The three minister-presidents’ statement sums up this argument: “Anyone who has paid contributions for 45 years has contributed enough. We will not abandon this principle.” The statement appears in their joint document, as quoted by the Neue Zürcher Zeitung.

On this point, the SPD is returning to a long-standing demand. Andreas Bovenschulte, Mayor of Bremen, points out that his party “has always been committed to ensuring that employees can retire without a reduction in their pension after 45 years of contributions”. He then turns the argument against the right: if the CDU no longer has a majority of its own to abolish this right, “there are many arguments” in favour of retaining it. He proposes funding this concession through a tax on high net worth individuals or by abolishing the tax relief granted on investment income. Manuela Schwesig, who heads the state of Mecklenburg-Western Pomerania, and Anke Rehlinger, Minister-President of the Saarland, also advocate retaining the scheme.

The other side, by contrast, believes that the country can no longer structure its pension system as if its working-age population were continuing to grow. “We are all living longer, so we will also have to work longer,” says Marc Biadacz, a social affairs expert within the CDU-CSU parliamentary group. In his view, removing any one measure from the compromise would cause the whole thing to collapse: the 33 recommendations were adopted unanimously by the committee and form the basis of a reform that is intended to be effective.

Those in favour of scrapping the scheme also challenge the perception that it is reserved for workers worn out by their jobs. Analyses cited by Handelsblatt, notably those by the German Institute for Economic Research (DIW), indicate that it also greatly benefits office workers who have not been engaged in physically demanding work and have the financial means to retire early. Economists also criticise it for exacerbating the labour shortage.

Protecting shift workers without scrapping the whole system

Between outright abolition and retaining the system in its entirety, a third way is emerging: reserving protection for jobs that are genuinely demanding.

Dirk Wiese, leader of the SPD group in the Bundestag, is therefore calling for “at the very least a clear and substantive rule for difficult cases”. He gives a specific example: “I am thinking, for example, of an employee who has worked for years on shift work in the steel or metalworking industries.”

He is also calling for protection for people aged 58 or 59 who have already planned for the end of their working lives, counting on being able to retire without a reduction in their pension after 45 years of contributions. The reform could thus retain its basic principle whilst introducing exceptions relating to health, the arduous nature of the work or the proximity of retirement.

It is precisely this sort of flexibility that threatens the political balance of the compromise. The more exceptions there are, the less the abolition will deliver the expected savings and additional years of work. But without exceptions, the reform risks being portrayed as a punishment imposed on those who started earliest.

“No à la carte options”

The Federal Minister for Labour, Bärbel Bas, is trying to hold the various parts of the agreement together. She began by summarising her position with two particularly telling phrases: “There can be no cherry-picking. This is a cohesive whole.”

On 2 August, she indicated she was willing to discuss everything, whilst reiterating that the reform was “truly a comprehensive package” which should, as far as possible, remain intact. Franziska Hoppermann, the CDU’s general secretary, takes the same line: “The reform was designed as a balanced package.” Singling out an issue such as retirement after 45 years of contributions would jeopardise “the soundness of the compromise”.

Michael Kretschmer, however, is threatening to turn his words into action. Unless the pension and long-term care reforms are amended, he warns, Saxony will not approve them in the Bundesrat. “And if other Länder do not approve them either, then these reforms will not go ahead.”

The legal implications of this threat are a matter of debate, as much of the text could be adopted without the consent of the Länder. Its political implications are clearer. Friedrich Merz must now defend a compromise that is contested by both the SPD and regional leaders within his own party.

Luxembourg has opted for an eight-month period, not an outright abolition

The parallel with Luxembourg is tempting, but there are significant differences. The Grand Duchy has retained the statutory retirement age at 65, as well as the options for early retirement at 57 and 60. The reform adopted on 18 December 2025 did not abolish early retirement after a long career. Instead, it opted to gradually extend the qualifying period required to claim an early pension from the age of 60.

From 1 July 2026, the 40 years previously required must be supplemented by additional months. The extension will total eight months by 2030: one month in 2026, another in 2027, then two further months each year between 2028 and 2030. Early retirement at the age of 57, which requires 40 years of compulsory contributions, remains unchanged.