BERLIN — Germany’s legislative body has formally endorsed a comprehensive pension reform package following weeks of internal dissent within Chancellor Friedrich Merz’s governing coalition. The legislation passed with 319 votes in favor, 225 against, and 53 abstentions in the Bundestag’s lower house on Friday.
The approved measures include a landmark provision that will maintain state pension levels at 48% of average wages until 2031, addressing immediate concerns about retirement security. The reform package also incorporates tax incentives designed to facilitate continued employment for retirees, a concession to Merz’s conservative bloc.
Significant opposition emerged from 18 young legislators within Merz’s center-right Union alliance, who expressed concerns about post-2031 provisions that would establish slightly higher pension levels than current law mandates. These dissenters projected potential annual costs reaching €15 billion ($17.5 billion), arguing that this financial burden would disproportionately affect younger generations.
Coalition leaders have attempted to mollify critics by emphasizing that an independent commission will deliver proposals for more extensive pension system reforms by mid-2026. This initiative responds to Germany’s demographic challenges, particularly its aging population trend that mirrors patterns seen across many developed nations.
The parliamentary victory comes during a politically turbulent period for Merz’s administration, which has faced multiple governance challenges since assuming power seven months ago. The chancellor has publicly acknowledged excessive public disagreements within his coalition government, which has prioritized economic revitalization and migration reduction since taking office.