Yasmin Fahimi, the chairwoman of the German Trade Union Confederation (DGB), recently rejected demands to raise the official retirement age. Addressing the DTS Nachrichtenagentur in Berlin during the presentation of recommendations by the DGB Pension Commission, she stated that the increase in life expectancy is not proceeding as rapidly as the corresponding increase in the retirement age. Consequently, she believes it is more advisable to reduce the retirement age.
Fahimi elaborated that life expectancy varies significantly across different professional groups due to differences in work histories and life realities. Therefore, she argued that it is impossible to create a “factually accurate reflection of life expectancy within the pension system.” Regardless of this complexity, she emphasized that the future funding of pensions must be “soundly structured” without resorting to cuts in benefits.
She specifically criticized the capital-funded pension model proposed by the Working Group for Company Pensions. This model, according to Fahimi, fails to provide additional protection for those with reduced earning capacity or dependents, and its assumptions regarding interest rates are “very ambitious.” She warned that adopting this model could lead to increased privatization and a decline in pension levels.
At the heart of the DGB’s own Pension Commission proposals are goals focused on securing the standard of living in retirement, establishing comprehensive occupational pension schemes, and ensuring smoother transitions for employees who cannot work until the standard retirement age. The commission reiterated that the retirement age must be reached in good health, aiming for a net provision equivalent to 70 percent of the average earnings.
To sustain the pension system, the commission suggests drawing more heavily upon high incomes, significant wealth, and capital gains. Furthermore, they propose that a federal demographic subsidy, funded through taxes, should cover demographic costs. Crucially, the commission rejects financing through reductions in social benefits or through higher consumption taxes. They also demand that all employers be legally obligated to offer occupational pensions to their employees based on collective bargaining agreements.
One central point was the outright rejection of raising the retirement age. Instead, the commission recommends implementing bridge solutions, such as allowing disabled persons to access the state pension starting at age 62, and offering unreduced partial pensions for employees facing health limitations. Additional proposals include strengthening solidarity through an unconditional basic pension supplement that is not subject to income-based assessments, and further developing the pension insurance system into a system for active workers.
