DGB applauds government's agreement on secure retirement benefits
In Germany, the demand for a stable pension level and an increase in the minimum pension has been a long-standing request from the DGB and its member trade unions. However, as of August 2025, there is no confirmed implementation of a proposed increase in the minimum pension level to 50 percent.
Current pension levels and reforms focus instead on incremental adjustments, such as the "mothers’ pension" increase planned for 2027, which raises benefits by about half a percentage point per step. This policy, driven by the CSU party, increases pension payments for parents with children born before 1992.
The statutory pension, on average, replaces roughly one-third of a retiree’s pre-retirement income, and the pension value (the value of one pension point) for 2025 is about €40.79 in both Western and Eastern Germany. The pension system in Germany operates on a pay-as-you-go basis, funded by current workers to support retirees, with social security contributions capped at income ceilings.
Despite various reform efforts, Germany faces economic challenges, including demographic aging and funding shortfalls. The government faces a large budget gap between 2027-2029. Poverty risk among pensioners remains a concern, with about 20% of people over 65 at risk of poverty or social exclusion, especially women with lower pensions due to career interruptions and caregiving periods.
Without a significant rise to a 50 percent minimum pension, many retirees may continue to face pension incomes that cover only a portion of their retirement needs, pushing them to rely more on private savings or social assistance. Incremental pension increases like the mothers’ pension add fiscal pressure on the pension system and the younger working population contributing today, raising concerns over sustainable financing amidst Germany’s demographic challenges and budget deficits.
Macroeconomically, increasing pension benefits—especially to a high floor like 50 percent of income—would require higher contributions or public spending, potentially slowing economic growth or necessitating higher taxes or cuts in other areas.
In summary, the proposed 50% minimum pension increase does not appear enacted or scheduled at present, with policy shifts concentrating on more gradual, targeted pension enhancements. The future pension adequacy and economic sustainability hinge on balancing benefit improvements with demographic and fiscal realities. The DGB and its member trade unions continue to advocate for a stable pension level, an increase in the pension level to 50 percent, and improvements to the basic pension supplement for improved age security.
- The health-and-wellness aspect of an aging population is a concern due to the high percentage of people over 65 at risk of poverty or social exclusion, with nearly one-fifth of pensioners facing this issue.
- In the realm of politics and policy, the DGB and its member trade unions are pushing for an increase in the pension level to 50 percent, aiming to secure a more stable financial future for retirees.
- In the world of finance and business, incremental pension increases like the mothers' pension add fiscal pressure on the pension system, raising concerns over sustainable financing amidst Germany’s demographic challenges and budget deficits.
