Merz demands 'all or nothing' on a 33-point pension overhaul

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.