German Chancellor Friedrich Merz has said he hopes the country's planned pension reform will be approved by parliament before the end of 2026, DKNews.kz reports.
Speaking during a question-and-answer session in the Bundestag on Wednesday, Merz said the government intends to move the legislation forward in the autumn parliamentary session.
«If things goes well, the parliamentary process will go ahead in autumn. I would hope it would be through parliament by the end of the year».
The proposed reform is expected to become one of the most significant changes to Germany’s pension system in recent years.
Reform Aims to Address an Aging Population
The planned overhaul is designed to strengthen the long-term sustainability of Germany’s pension system as the country faces demographic changes and increasing life expectancy.
A government-appointed commission has proposed several key measures, including:
- The creation of a Swedish-style pension fund
- A gradual increase in the retirement age
- Measures aimed at improving the long-term financial stability of the pension system
The recommendations are intended to reduce pressure on public finances while ensuring the pension system remains sustainable for future generations.
Swedish Model Under Consideration
One of the central elements of the reform is the introduction of a pension investment fund modeled on Sweden’s system.
Such a fund would invest pension assets in financial markets with the goal of generating long-term returns and supporting future pension payments.
The proposal reflects a broader effort to modernize Germany’s retirement system and adapt it to changing demographic realities.
Demographic Challenges Drive Reform
Germany, like many European countries, is facing the effects of an aging population.
With people living longer and birth rates remaining relatively low, fewer workers are contributing to the pension system while the number of retirees continues to grow.
The government believes reforms are needed to preserve the system’s financial balance over the coming decades.
Why This Matters
Germany’s pension reform is closely watched across Europe because many countries are facing similar demographic pressures.
If approved, the legislation could reshape how pensions are financed and paid in Germany while serving as a model for other nations considering comparable reforms.
The proposal also reflects a growing international trend toward combining traditional public pension systems with long-term investment strategies to improve sustainability.
