The Union party’s proposal to restrict early retirement benefits to count only actual years of work would severely disadvantage women, according to calculations presented by the German Institute for Economic Research (DIW).
Currently, the system allows for the inclusion of non-working periods-such as years spent caring for relatives, unemployment, or raising children-when calculating contribution years. To save costs, CDU faction leader Thorsten Frei advocated for a tougher standard: in the future, only standard working years should be recognized. The DIW modeled the potential consequences of such a reform, concluding that women would be the clear losers.
The analysis, which examined the 1958 generation, showed that approximately one-third of individuals used the early retirement scheme. Out of this group, 153,470 were men and 123,658 were women who left the workforce before the required 45 contribution years. The core complication is that these childcare and care periods were accumulated almost exclusively by women. Removing the allowance for these times would reduce the eligibility for early retirement by 52.1 percent for women, while men would hardly be affected (a reduction of only 0.5 percent).
Furthermore, while the Union’s idea would create significant gender disparities, the DIW estimated that the financial savings would be relatively modest, cutting costs by 20.6 percent compared to current expenditures.
Another alternative being debated in politics is increasing the eligibility age from 45 to 47 years. The DIW found that this option offers a larger financial benefit than simply changing the rules regarding childcare and care times. However, this alternative would still negatively affect women: 38.3 percent of men and 51.2 percent of women in the 1958 cohort would forfeit their right to early retirement. According to DIW economist Niklas Döhler, there is no easy compromise for early retirement, and he argued that the scheme should be abolished entirely, with the resulting savings used instead to support retirees who receive low pensions.
Political consensus was reached in the summer between Chancellor Friedrich Merz (CDU) and former SPD leader Bärbel Bas regarding the comprehensive implementation of the pension reform, including the abolition of early retirement. However, the coalition has since fragmented, with many state premiers resisting the measure. The current retirement system is estimated to cost around ten billion Euros per year for each cohort.
