A large majority of MPs in the Bundestag approved a major pension reform that gives a ‘way out’ for retirement as early as 63 for employees who paid contributions for 45 years. It also slightly improves women’s pension level and introduces the principle of ‘flexible retirement.’ This could be the early stages of the evolution of the German system towards an ‘individual’ model, with no fixed universal retirement age. For businesses, the only problem with this law, which will come into force on July 1, 2014, remains funding this reform, as contributions will gradually increase.
In the end, the pension reform defended by Andrea Nahles, social-democratic Minister for Employment and Social Affairs, bitterly debated these past few weeks, was adopted by a majority of votes (460 – 316 required). This major support followed a compromise reached earlier this week between the conservatives and social democrats. The compromise added the principle of ‘flexible retirement’ to the law. This law should cost an additional €9-11 billion each year. The total annual volume of contr
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