Pension reform on the horizon: what does this mean for your SME?
April 2026 - On 6 March 2026, the federal government reached an agreement on a comprehensive pension reform in our country. This means the bill can now be submitted to parliament. If proceedings go according to plan, the new rules could come into force before the summer.
The reform is extensive and has two clear objectives: keeping people in work for longer and strengthening the link between work and pension accrual. The measures broadly fall into two categories: rules regarding the retirement age and changes that may affect the final pension amount.
Stricter rules for early retirement
The statutory retirement age will remain at 66 for the time being and will rise to 67 from 2030. Early retirement will still be possible, but the conditions will be tightened in some respects.
New definition of a career year
A key change is the new definition of a career year. Until now, a year counted if a person had worked or had an equivalent period of at least 104 days. This is being increased to 156 days, which roughly corresponds to part-time employment. Equivalent periods – such as sick leave, care leave or temporary unemployment – will continue to count.
According to the government, the measure will have no impact on around 70 per cent of employees. For the remaining group, however, the earliest possible retirement age may be pushed back slightly.
To ease the transition, a number of adjustments have been made:
· those who were 60 or older in 2025 will have to work for up to one year longer
· those who were 59 in 2025 will have to work for up to two years longer
· the first year of employment counts from 104 days worked
· employees are given a reserve of 5 ‘bad luck days’ to ensure that years in which they fall just short of 156 days still count
Earlier retirement for those who started working at a young age
For people who started working at a young age, there is an additional option. Anyone who can demonstrate 42 years of actual service may take early retirement from the age of 60, even though the general requirement is 44 years of service. However, under this scheme, each of those years must include at least 234 days of work, which corresponds to approximately 75% employment.
Bonuses and penalties strengthen the link between work and retirement
A second major reform concerns the calculation of pension amounts. The government is introducing a system of bonuses and penalties.
Pension penalty
Anyone who stops working before the statutory retirement age may receive a lower pension. For people born in or after 1975, the rule is: a 5% reduction in pension for every year they stop working early.
Not everyone will be automatically affected. Those who meet the following conditions can avoid the penalty:
· at least 35 years of working life
· at least 156 days worked each year
· a total of 7,020 days worked over the entire career
According to the government, around three-quarters of employees already meet these conditions by the time they take early retirement.
Pension bonus
Conversely, those who continue to work beyond the statutory retirement age can receive a higher pension payment. For people born in or after 1973, the pension increases by 5% for each additional year worked. The same career conditions apply here too (35 years and 7,020 days worked).
Less favourable pension accrual during certain periods of non-employment
The government also intends to reform the system of so-called ‘equivalent periods’. These are periods during which a person is not working but still accrues pension rights.
Pension rights will continue to accrue for SWT (early retirement), unemployment and ‘landing jobs’, but the calculation will be less favourable. In future, income during these periods will be replaced by a limited notional wage in the pension calculation. In addition, a cap will be introduced: for people born in or after 1968, such periods may account for a maximum of 20% of their working life when calculating their pension. Important: temporary unemployment remains fully treated as an equivalent period, which remains relevant for sectors where this system is common.
What does this mean for SMEs?
For your business, the reform will mainly have indirect effects:
· on average, employees will remain active in the labour market for longer
· career breaks towards the end of a career will become less attractive
· it will become more important to facilitate sustainable careers, for example through adapted work or reintegration following illness
Among other things, this means that strategic HR policies regarding older employees will become even more important. Employees will more often have to weigh up the choice between working longer or receiving a lower pension, which may also affect the availability of experienced staff.
