Pension reform: DIW President Fratzscher advocates for the abolition of the "pension at 63"

The President of the German Institute for Economic Research (DIW), Marcel Fratzscher, considers the planned abolition of the "pension at 63" without deductions to be indispensable. He told the "Rheinische Post": "The abolition of the pension at 63 is a central and financially the most important element of the planned pension reform."

Abolition would create approximately 10 billion euros in long-term savings and 125,000 additional employees per pensioner generation. "Without this element, the pension reform is dead," the DIW President continued. "The federal government would have to start again from scratch and, above all, completely rethink the financing of statutory pensions."

Without the abolition of "pension at 63", statutory pensions would, according to Fratzscher, lead to an even greater redistribution from young to old and also from poor to rich in the future. "This is because those who benefit from the pension at 63 are much more likely to be high earners and men, and much less likely to be people who are threatened by old-age poverty."

CDU politicians defend "pension at 63" in a letter

The three eastern German CDU prime ministers Michael Kretschmer (Saxony), Sven Schulze (Saxony-Anhalt) and Mario Voigt (Thuringia) had openly opposed the recommendation of the pension commission. In a letter to the federal government, they defended the "pension at 63" without deductions. "Anyone who has paid in for 45 years has paid in enough.

We do not give up this principle." According to the commission's recommendation, the earlier retirement without deductions after 45 years of contributions, known as "pension at 63", is to be abolished.

Federal Chancellor Friedrich Merz (CDU) and Minister of Labour Bärbel Bas (SPD) had stated that they wanted to implement all recommendations of the pension commission in full. CDU parliamentary group leader Thorsten Frei and CDU General Secretary Franziska Hoppermann made it clear at the weekend that the CDU is sticking to the abolition as part of a reform package. CSU leader Markus Söder is also against re-examining the overall package.

Federal Minister of Labour Bas, who is responsible for the topic in the cabinet, had spoken of a "total work of art". She called on the Union to clarify its position on abolition. She did not object to re-examining the package if that were the Union's opinion. "But I don't see that yet," said the SPD leader in the ZDF "summer interview".

The "pension at 63" is a common but no longer entirely correct term: currently, earlier retirement without deductions is possible from the age of 64.5 with sufficient insurance time.