A proposal by the German Trade Union Federation (DGB) to force all employees into a company pension scheme has laid bare a sharp divide between political parties and their own internal wings. DGB chairwoman Yasmin Fahimi insists that employers must foot most of the bill for what she calls an essential second pillar, arguing the statutory pension alone can no longer guarantee a decent retirement.
The plan targets roughly 20 million workers in Germany who currently have no occupational pension provision (bAV). Fahimi points to other European countries where total retirement contributions sometimes exceed 20 percent of salary. She wants the new obligation to be organised primarily through collective bargaining agreements, a route that the DGB expects will encounter fierce resistance from business lobbies. “Company participation is indispensable,” she said.
Union and SPD signal support; Liberal and conservative voices push back
Support for the idea has come from the workers’ wing of the Christian Democratic Union (CDU) and from the Social Democrats (SPD). CDU parliamentarian Dennis Radtke and SPD labour politician Sebastian Roloff have both voiced approval. Economist Jens Südekum also expressed openness to expanding occupational pensions.
Opposition is crystalising inside the CDU and within the pro-business Free Democratic Party (FDP). CDU member Gitta Connemann rejects any form of statutory compulsion. FDP vice-chair Wolfgang Kubicki was more blunt, criticising the plan as a step toward rigidity and suggesting that Chancellor Friedrich Merz should exclude the DGB leadership from reform talks if it sticks to its demand.
Young Union adds a twist to the retirement debate
The intervention comes amid a broader discussion about retirement policy in Germany. Merz’s own pension concept relies on the three-pillar model, making a strengthened company pillar a natural fit. Into that discussion stepped Johannes Winkel, head of the Junge Union (JU), the CDU’s youth organisation. He proposed cutting next year’s planned pension increase of 4.2 percent and redirecting the freed funds to BAföG student aid and parental allowance, offsetting planned cuts in those areas.
The DGB leadership has promised to publish concrete details of its proposal at the end of June. For now, the battle lines are drawn: between those who see a mandatory company pension as the only way to close the coverage gap, and those who view it as an unacceptable incursion on employer and employee flexibility.
