A prominent member of Germany’s Christian Democratic Union (CDU), Pascal Reddig, is advocating for substantial reforms to the country’s pension system. Reddig, who chairs the Young Group within the CDU parliamentary faction, argues that a fundamental overhaul is necessary to distribute the financial burden more equitably across generations.
Speaking to the media, Reddig emphasized the need for proposals from the current government’s pension commission to be not only formulated but also implemented. He suggests adjustments including a later retirement age and more moderate increases in pension benefits.
Reddig specifically mentioned the possibility of raising the retirement age to 70, a solution gaining traction amongst economists and pension experts. Recognizing the political challenges, he proposed linking the retirement age to increasing life expectancy as a potential compromise, suggesting a gradual increase over time. He also argued that the duration of pension payments has risen considerably, placing a strain on the insurance system.
Furthermore, Reddig called for disincentivizing early retirement, while clarifying that this wouldn’t apply to professions with physically demanding jobs such as roofing and nursing. He proposed significantly higher reductions in pension payments for those who retire early and suggested effectively phasing out the possibility of retirement at 63.
Beyond the retirement age and early retirement provisions, Reddig also advocates for a restructuring of how pensions are adjusted. He supports reinstating and even doubling the “sustainability factor” – a mechanism designed to dampen annual pension increases when the number of pensioners outpaces the number of contributors – which he says was previously suspended. He believes this is crucial for securing the long-term financial viability of the pension system.
Reddig also proposes decoupling increases to existing pensions from wage growth, suggesting they be linked to inflation instead, arguing it would be a fairer approach and contribute to cost savings. He warned that maintaining current levels of pension increases would jeopardize the stability of the entire system.
