The Federal Association of German Employers’ Associations (BDA) is calling for the complete abolition of early retirement without deductions. According to BDA Chief Executive Steffen Kampeter, this form of unreduced early retirement constitutes a “costly wrong path” that the social safety net can no longer afford amid demographic changes. He argues that the system forces taxpayers to fund early exits from the workforce by experienced employees while there is a pressing need for skilled professionals. In his view, maintaining this feature sends the wrong signal at the wrong time.
A new study highlights that eliminating this perceived disincentive could save billions of euros while simultaneously retaining urgently needed skilled workers in the employment market. Kampeter emphasized that anyone aiming to stabilize the pension insurance, alleviate the burden on contributors, and ensure economic growth must move past the early retirement without penalty. He stressed that support should be reserved for those who genuinely cannot work any longer, not for all retirees universally, calling for a candid and brave pension policy replacement for expensive early retirement premiums.
Data from a study conducted by the Bertelsmann Foundation suggests that phasing out unreduced early retirement would generate significant savings for particularly long-serving insured persons. Based on modeling, the pension fund could be relieved of approximately 9.5 billion euros per annual cohort, though this saving is distributed across the entire pension receiving period for that cohort. Furthermore, this scenario would make around 125,000 additional full-time workers available to the labor market.
Although the Union has long advocated for the elimination of this benefit as part of planned reforms, the Social Democratic Party (SPD) opposes the move. SPD Parliamentary Group Vice President Dagmar Schmidt told the RND that many individuals simply cannot continue working into old age, particularly in physically or psychologically demanding jobs, or if facing health limitations. She warns that removing the unreduced early retirement benefit would disproportionately harm these individuals, forcing them to work longer under strenuous conditions or facing permanent pension cuts. Schmidt insisted that those who have spent 45 years working, paying into the system, raising children, caring for relatives, and contributing to the country deserve respect, security, and a fair transition into retirement. Therefore, she stated, the unreduced pension for long-serving members is an essential social policy achievement, rooted not in privilege, but in the principle of fairness following a long working life.
