Merkel asked to raise employment age to 70

2015-01-02 14:06

The head of Germany’s unemployment authority has called on Chancellor Angela Merkel’s government to promote extended employment to age 70 for healthy workers who want to work longer.

Frank-Juergen Weise, president of the Federal Labour Office, pointed to the current strong demand for skilled labour in Germany which, at 6.6%, has its lowest unemployment rate in nearly 25 years.

“Flexible exits from working life into a pension are a good model as a matter of principle,” he told an interviewer from the daily newspaper Die Welt.

Merkel’s government has been perceived as moving in contradictory directions on its pensions policy.

Since the start of 2012, the official retirement age has been incrementally rising from 65. At the start of 2029, it is scheduled to top out at 67. But Merkel has lowered the retirement age for people with long employment histories and no academic training to 63.

Weise called for rules to be restructured “to create income incentives so people can voluntarily work to 70,” referring to Germany’s income-related pensions, which are higher for top earners.

The current rules mean that workers who stay past retirement age have the benefit of full pay, but see little improvement in their pensions later. The early-retirement rule, implemented in July, has raised fears of a rush for the exit among older workers.

So far, 186 000 Germans have applied for early retirement, national pensions authority figures cited by Die Welt show.

“These new figures tend to suggest that the full pension at 63 is going to be drawn in greater numbers than expected,” warned Alexander Gunkel, a senior German Employers’ Federation (BDA) official quoted by Die Welt. “These bad incentives to retire early are having their effect.”

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