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The German government has announced plans to gradually raise the retirement age from 67 to 70 in response to the country's rapidly aging population.
According to the British daily the Guardian and other media outlets, Germany plans to phase in a retirement age of 70 by the early 2090s as part of a broader pension reform package, Yonhap News Agency reported.
Germany is considered one of the fastest-aging developed nations. Last year, the government assembled an expert committee to draw up pension reform proposals, aiming to address the growing imbalance caused by a shrinking pool of workers paying into the system and a rising number of retirees living longer.
The expert committee released its findings Tuesday, recommending that the retirement age be "gradually raised to 70 by the early 2090s, linked to increases in life expectancy."
German Chancellor Friedrich Merz also told a news conference that the reform was designed "to secure the stability of pensions and distribute the pension burden fairly across generations," urging swift action on the proposals.
The committee also recommended that pension contributions paid by workers and employers be invested in the stock market to boost the value of future pensions.
Labor groups and other critics have pushed back, saying the plan amounts to demanding people "work longer and work more." The opposition means the road to implementation is likely to be bumpy.
The reform package must also clear parliamentary debate and a vote before it can take effect.
Germany records first population decline since COVID-19 pandemic
Germany continues to grapple with a labor shortage that has deepened alongside its aging demographic.
Last year, the government approved draft legislation for an "active pension" law that would exempt from taxation the earnings of retirees who continue working beyond the statutory retirement age.
Under the bill, if passed by parliament, pension recipients' earned income would be tax-free up to 2,000 euros (3.3 million won) per month, or 24,000 euros (39.7 million won) annually, starting the following January.
The Finance Ministry said the measure would "continue to generate momentum for Germany's economic growth" and help "address labor shortages in many sectors while keeping experience and expertise in the workplace longer."
Meanwhile, Germany is experiencing its first population decline since the COVID-19 pandemic.
According to Germany's Federal Statistical Office, the country's population fell to about 83.5 million last year, down 110,000, or 0.1 percent, from 2024. The low birth rate is also worsening — births last year totaled 654,300, the lowest since World War II. By region, the former East Germany shrank by 0.5 percent, or 57,000 people, a steeper drop than the former West Germany, which fell 0.1 percent, or 68,000 people.
yul@heraldcorp.com
