Early Retirement at 63: Fair Compensation or Pension Giveaway?

After Easter, Germany's new labor and social affairs minister Andrea Nahles will be presenting the grand coalition's first major reform proposal for parliamentary debate: a bill to improve the benefits provided under the statutory pension system. A centerpiece of the reform package is early retirement on a full pension at 63 for those who have been paying into the state pension system for a long period of time. In defense of the proposal, Nahles has launched an information campaign emphasizing that "It's not a giveaway; it's earned." Critics, however, call early retirement at 63 a costly political gift to favored groups of voters with dubious social policy value, and warn that it could unleash a new wave of early retirement. In their view, the reform could undermine recent successes in securing the long-term financial sustainability of the pension system and in gradually extending working life.