Thursday, November 18, 2010

Germany: Government Reaffirms Commitment To Raising Retirement Age

According to news reports, Labor Minister Ursula von der Leyen has confirmed that the plan to raise the retirement age gradually beginning in 2012 from 65 to 67 will proceed and presented a report showing improved employment opportunities for older workers. Von der Leyen said that the employment rate for those aged 60 to 65 is currently at 38% and has doubled in the last 10 years; furthermore, without the changes, Germany would be forced to cut pensions or drastically increase employee contributions.

Economists cited in the daily Financial Times Deutschland argued this trend should continue--Martin Dietz from the Institute for Employment Research (IAB) told the paper that an employment rate of 50% was possible for over-60 workers.

The retirement change will begin in 2012, with those born in 1947 having to work one month extra. The transition is to be complete years later when those born in 1967 retire at the age of 67.

Sources: Deutsche Welle "Government sticks to plan for retirement age to increase to 67"; The Local "Labour Ministry defends raising retirement to 67" (November 17, 2010)

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