BDA Criticizes Resistance to Abolition of Early Retirement

The background to the debate is the pension package backed by the CDU and SPD, which provides, among other things, for the gradual abolition of penalty-free early retirement starting with a specific birth cohort. Critics inside and outside the coalition had recently called for this component to be separated from the rest of the reform or withdrawn entirely. The BDA sees this as a serious threat to the package as a whole.

Background of the Pension Package

Pascal Reddig, responsible for social policy on the BDA executive board, warned of the consequences of such a split. If the abolition of penalty-free early retirement were separated out from the pension package, "the whole house of pension reform could collapse" ("kann das ganze Haus der Rentenreform zusammenstürzen"), he said. In doing so, he pointed to the carefully balanced architecture of the package, comprising contribution commitments, safety lines, and demographic stabilization measures.

From the employers' perspective, watering down the agreed rules would be associated with high costs and a loss of confidence in the reliability of pension policy. Kampeter noted that the coalition parliamentary groups had only passed the pension package after lengthy negotiations. If individual elements were now untied again, this would undermine the basis of the agreement and jeopardize planning certainty for businesses and employees alike.

Criticism from the Governing Coalition's Parliamentary Groups

In substance, the criticism is directed, among other things, against initiatives from within the SPD and CDU ranks that want to reconsider the end of penalty-free early retirement with regard to older workers. Particularly in the Bavarian Berchtesgadener Land region and in other regions with a high share of older employees, hardship cases had recently been pointed out. The BDA counters that the transitional arrangements in the pension package already provide for social cushioning.

Kampeter announced that the employers' side would continue to advocate for the retention of the agreed rules in the upcoming parliamentary deliberations. Should changes nevertheless occur, a broad debate over the financing of the statutory pension insurance as a whole would loom. Then, other building blocks of the package would also come under scrutiny.

Further Course of Action

Overall, the BDA assesses the pension package as an overall political promise that can only take effect in the form in which it was adopted. In the association's view, a partial withdrawal would send the signal that pension policy agreements can be revoked again at short notice. This would be incompatible with the architecture of the reform endorsed by the social partners.

Several German media are reporting on the issue; the BDA's statement came against the backdrop of the ongoing debate within the governing coalition's parliamentary groups. No specific parliamentary dates for a possible renegotiation of the pension package had been set at the time of going to press. An official reaction from the federal government to the BDA's criticism was also not initially available.