Bundestag Secures Pension Law Passage Amidst Coalition Discord
BERLIN – The German Bundestag today passed a contentious pension law with an absolute majority, ensuring the stabilization of pension levels at 48 percent by 2031. The vote, secured on December 5th, 2025, comes after weeks of internal coalition disputes and highlights the importance of Chancellor Merz securing a majority autonomous of dissenting factions.
The law’s passage was achieved despite opposition from the Greens and the AfD, who rejected the bill, and abstentions from the left-wing faction. A key concern within the governing coalition centered on the financial implications of the law,with the Young Group within the Union parliamentary group voicing objections to what they perceived as a disproportionate burden on younger generations to fund the projected billions in expenditure.
“The need for pension reform in Germany will not be smaller as an inevitable result of the Bundestag decision, but will be even greater,” stated Junge Union chairman Winkel in an interview with Der Spiegel.Business associations echoed these concerns, criticizing the postponement of complete pension system reforms. However, the social association VdK welcomed the decision, asserting it would protect pensioners from declining purchasing power in the coming years.
Chancellor Merz emphasized that today’s vote represents a first step, renewing a commitment to propose a “very comprehensive pension reform” next year.”The decision in the Bundestag was not the end of our pension policy, but just the beginning,” Merz said, outlining plans for an expert commission to deliver recommendations, followed by swift governmental action. The coalition committee agreed last week to establish this commission within the current year.
Acknowledging the challenges ahead, Merz affirmed the government’s dedication to maintaining an affordable, efficient, and intergenerationally fair welfare state.
Alongside the core pension stabilization law,the Bundestag also approved drafts for active pensions – designed to incentivize longer working hours through tax benefits – and measures to bolster company pensions. The complete pension package is slated to take effect on January 1, 2026, pending approval from the Federal Council in two weeks.
