Author`s name Pravda.Ru

Germany about to raise pension age to 67

Germany's government is considering a proposal to increase the statutory retirement age to 67 from 65, in a move that, if agreed, could send a reform signal across Europe but would stir a backlash from welfare and pensioners' groups in Germany.

Officials close to the coalition negotiations between the Christian Democratic Union and the Social Democrats said the proposal to raise the retirement age - to tackle rapid population ageing and spiralling pension costs - was under discussion. CDU officials said an outline deal had been agreed in across-party working group on pension issues, but an SPD official said that his party still had concerns about the proposal. He said a final agreement was possible before November 12, when the talks are expected to be completed.

Many European countries are struggling with an ageing society, but Germany would be one of the first nations to increase the retirement age as a means of expanding the workforce and easing the burden on state coffers.

If agreed, a law would be adopted within four years under the chancellorship of CDU leader Angela Merkel to raise the retirement age on a step-by-step basis from 2011 onwards.

The decision would be combined with programmes to promote employment for elderly people, and to allow people to retire at 65 if they have paid pension insurance contributions above a certain threshold.

In an apparent signal that the retirement age may be increased, Merkel said last week: “We have to consider, for the period from 2010 onwards, the need to extend the length of working lives”.

An expert committee in 2003 recommended raising the retirement age to 67, but Gerhard Schrцder, the outgoing chancellor, avoided taking this politically sensitive step, arguing that it would not be necessary until 2008 at the earliest.

Welfare and pensioners' groups, and sections of the SPD oppose raising the retirement age, arguing that there are too few jobs for elderly people, and that those who have paid decades of pension contributions should be allowed to retire at 65, Financial Times reports.