“This is not the end of our pension policy, but just the beginning,” said Federal Chancellor Friedrich Merz following the vote in the German Bundestag on the 2025 pension package, adding that this was a first step “in the right direction”.

Safeguard extended, mothers’ pension expanded

Without the pension package, the pension level would be decoupled from wage growth starting in 2026 and is expected to fall by around one percentage point to 47 per cent by 2031. The extension of the safeguard stabilises this level at 48 per cent. In addition, the extension of the 'mothers’ pension' from 1 January 2027 will equally recognise the time mothers and fathers spend raising their children during the first three years, regardless of the year in which they were born. 

The pension package is also closely linked to other pension policy measures that the Federal Government is launching: the early retirement pension, the active pension and the strengthening of the company pension.

Pension reform announced

The Chancellor also announced a pension reform. Initially, a commission will make proposals for this in mid-2026, which the Federal Government will expedite and then introduce the pension reform for passage through parliament. 

“Our welfare state will continue to be affordable, efficient and intergenerationally fair in the future,” assured Federal Chancellor Friedrich Merz. This is a promise to all generations.

Read the full press statement here (in German only):