Three out of four Germans want to keep the option of retiring without deductions after 45 years of contributions, according to a YouGov survey commissioned by the VdK social welfare association. That stance puts the public on a collision course with a new cost-saving analysis from the German Institute for Economic Research (DIW).
The DIW study, prepared for the Bertelsmann Foundation, calculates that scrapping penalty-free pension access for long-term contributors would net around €9.5 billion in savings per retiree cohort. The statutory pension insurance alone would see its burden shrink by €10.4 billion. Roughly 30 percent of all
VdK president Verena Bentele warned that raising the retirement age would carry harsh social consequences. The federal government has said it plans to present a pension reform package before the summer break.
Termination talks often last under ten minutes
Employees approaching retirement enjoy no special dismissal protection under German law. Age is only one factor in the social selection process for operational redundancies, where employers must weigh length of service, age, maintenance obligations, and job market prospects. Many companies try to end employment through a mutual severance agreement, but experts caution that the long-term impact on pension entitlements is frequently underestimated.
A recent termination report based on over 6,000 respondents lays out the reality: 63 percent of firing conversations last a maximum of ten minutes. Most dismissals are delivered in person, 22 percent in writing, and 11 percent via video call. Only one in three affected employees got the chance to present their side. Nearly half of all those let go leave without any severance payment.
AI cited as cause for layoffs grows sharply
A striking trend: the share of terminations justified by the use of artificial intelligence jumped from one percent to eight percent over four years, illustrating how digital transformation is translating into concrete job losses.
Managers face particular risk close to retirement
For executives, the danger spikes in the final years before pension age. Even generous severance packages may not compensate for lost pension commitments. The cancellation of company pension plans can eat up the value of the separation deal entirely. Instead of lump-sum payouts, experts recommend multi-stage transitional compensation, which is often more tax-efficient. And where old benefit plans include invalidity promises, employers remain legally bound—even if the statutory pension system grants only a temporary reduced-earnings pension.
