The 30 pension reform proposals put forward by a specially-convened commission of experts and politicians have met with praise from conservative political groups and outcry from opposition parties and trade unionsin Germany.

The 13-person commission's detailed report is due to be officially released on Tuesday, but the main proposals were leaked to the German media this weekend, drawing a flurry of reactions. Government circles in Berlin say the Cabinet is expected to agree on a plan based on the reforms in the near future.

Speaking to the public at a federal government open day event in Berlin on Sunday, Chancellor Friedrich Merz insisted that reforms were the only way to ensure that Germany's expensive pension system would be affordable in future. 

Federal Labor Minister Bärbel Bas, of the center-left Social Democratic Party (SPD) also defended the need for reforms. "We are now putting measures in place for the younger generation so that they will have higher pensions," she said. "And we need to make sure that fewer people take early retirement."

Key pension reform proposals

The proposals — which are being presented earlier than initially planned, partly due to pressure from the government — contain a mix of compromises and some long-expected ideas.

• Legal pension age hitched to life expectancy

Germany's legal retirement age is to be made dependent on life expectancy, which would, according to the commission's calculations, mean that it would reach 67.5 in 2041, 68 in 2051, and 70 by 2091. 

This has drawn criticism from left-wing voices. Philipp Türmer, head of the Jusos, youth organization of the Social Democratic Party (SPD), told public broadcaster DLF that it would have been fairer to hitch the retirement age to the number of years one contributes to the system.

Jan Scharpenberg, pensions expert at the financial advice company Finanztip, said that this idea made sense, although given current life expectancy prognoses it wouldn't make that much difference in the near term. 

• No early retirement at 63

This proposal would cut the option of going into early retirement at 63 without losing any benefits, if one has paid into the system for 45 years. This idea was particularly criticized by the industrial trade unions, who say that their workers are particularly affected by physical and psychological stress. Christiane Benner, head of the IG Metall union, told DLF that this proposal "completely ignored" the life and work situations of industrial workers.

Scharpenberg said that this would indeed be felt as a "bitter cut" by some. "It is probably necessary, but it is certainly a tough cut," said Scharpenberg. Another cut would see increased benefit deductions for people taking early retirement. "That, too, can be criticized, but the current situation is that the deductions are too low, making it more worthwhile for many Germans to retire early," he said.

The change is likely to affect a lot of German workers: A recent Forsa institute poll carried out for the public health insurer DAK found that 44% of Germans would like to take early retirement, and that the longer people work, the more likely they are to take sick leave.

• Pensions invested in capital markets

Some 0.5% (rising to 2%) of workers' pension contributions are to be invested in the capital markets. Here, the expert commission took its inspiration from Sweden, where pensions are not exclusively financed by contributions from workers. In Germany, meanwhile, some 18% of gross income goes directly into paying pensions. 

"That's a good idea, but it definitely depends on the details," he said. "One of the most important thing that the Swedes did, in my opinion, was founding a special pension commission, where every party is represented, whether it is in the government not.” That would make the Swedish model more independent of changing governments and plans. It wasn't yet clear, he said, whether Germany would follow that path.

•  More contributors, fewer civil servants

Another part of the plan is to reform the system to allow fewer people to become civil servants, as in Germany, civil servants contribute to their own special state pension scheme. Labor Minister Bas had wanted this system to be scrapped entirely, forcing civil servants to pay directly into the same system as everyone else.

As a compromise, the commission proposed that the civil servant pension levels should be altered to be in line with the general pension system. Public broadcaster ZDF also reported that the commission wants to reduce the number of people allowed to be civil servants.

All in all, Scharpenberg said he was being cautious with his judgment until the commission's full report was published on Tuesday. "But in principle, we can say it goes in the right direction," he told DW. 

Edited by Rina Goldenberg