Merz demands 'all or nothing' on a 33-point pension overhaul
A commission hands Germany a capital pillar and life-expectancy retirement ages; the SPD and unions revolt
Summary
On 23 June 2026 a 13-member pension commission handed Chancellor Friedrich Merz and Labour Minister Baerbel Bas a report with 33 recommendations. Merz declared "all elements of this reform package must now be implemented quickly," insisting the proposals interlock and cannot be cherry-picked. Headline measures: a mandatory capital pillar (Kapitalrente, contributions rising from 0.5% to 2% of gross wages from 2028), coupling the retirement age to life expectancy from 2032, abolishing the deduction-free pension after 45 contribution years, and raising the early-retirement age from 63 to 64. The package is meant to be settled in a broader tax, pension, care and labour bundle at a coalition committee around 30 June. SPD figures and unions are already resisting — the central test of the Merz Koalition Reformpaket Juli 2026 crunch in Germany.
By the numbers
- 33 — recommendations from the 13-member commission.
- 0.5% → 2% — Kapitalrente contribution, phased from 2028.
- 63 → 64 — early-retirement age.
- 2032 — when retirement age would track life expectancy.
Why it matters
Merz is staking authority on passing a structurally unpopular overhaul as a single package against his own coalition partner's objections. Pensions are Germany's largest spending line; the outcome shapes the Germany's 2027 budget: record new borrowing and a €140bn planning gap and tests whether the black-red coalition can deliver hard reform at all.
What to watch
- The 30 June/1 July coalition committee outcome.
- Whether the SPD forces the package to be unbundled.
- Union mobilisation against the capital pillar and later retirement.