Germany's Friedrich Merz is preparing an important pension reform that, according to EFE, would gradually increase the retirement age towards 70. The plan includes a first stage that's already in place, completing a rise to 67 in 2031. After that, the retirement age in the country would be theoretically linked to life expectancy, with the goal of reaching 70 no earlier than 2092.
And it cannot be sustained by public funding alone. The plan would introduce a mandatory private-funded pension that would work alongside the public system. With this method, workers and employers would gradually contribute up to 2% of salaries by 2031, and the money would be then invested in capital markets to complement the state-funded pension.
Before the criticism, the German government presents the reform as a solution to protect pensions across generations, as many other European countries deal with similar problems. Chancellor Merz believes the modern approach would prevent pension levels from falling while keeping contributions at reasonable levels. In fact, supporters argue it could eventually help retirees reach around 70% of their final salary by combining public, company, and private pensions.
If successful, it'll be not long before other EU countries try to follow suit, but those will have to keep their specific conditions in mind.