German Youth Wing Calls for Smaller Pension Increase as DGB Pushes Mandatory Company Pensions

Junge Union seeks 3% pension cap to fund BAföG, while DGB demands mandatory corporate pensions for 20 million workers, sparking political clashes and a reform summit.

The head of the Junge Union, Johannes Winkel, is demanding a lower pension adjustment than the projected 4.2 percent. He wants the increase capped at 3 percent and the freed-up money redirected toward BAföG or parental benefits. SPD, Greens, and the Left oppose that idea. Meanwhile, the German Trade Union Federation (DGB) is pressing for a legally binding company pension for all employees.

DGB chairwoman Yasmin Fahimi detailed the union’s demands on Sunday. She wants mandatory corporate pension coverage for roughly 20 million workers who currently have none. Employers would be forced to contribute to the financing. "In other European countries, significantly higher contributions are made to old-age provision," Fahimi said. A key issues paper is expected by the end of June.

Support comes from Dennis Radtke, head of the Christian Democratic Workers’ Association (CDA). He backs the compulsory co-financing by companies. Sharp opposition comes from the FDP. Party leader Wolfgang Kubicki called the plan unsuitable and demanded that Fahimi be uninvited from a planned reform summit.

The political battle comes amid existing rules on company pensions. For 2026, monthly contributions to occupational pension schemes are tax- and social-security-free up to €338, and tax-free up to €676. Since 2019, employers must pay at least a 15 percent subsidy when converting salary into contributions — provided they save social security contributions as a result.

Separate court rulings are also shaping the workplace landscape. In April, the Federal Labor Court (BAG) ruled that dismissals are invalid if a proper mass layoff notification is missing. The decision affects NTB, a terminal operator in Bremerhaven that plans comprehensive automation — roughly 500 of its 1,000 jobs are at risk. On business travel, the BAG clarified that travel time is generally not working time. An exception exists when the journey uses public transport during regular working hours or when using a vehicle was expressly ordered. These rulings are supplemented by European Court of Justice decisions from 2025 on trips from a central location to varying work sites.

A significant change for mini-job holders takes effect on July 1, 2026. For the first time, they can reverse their exemption from compulsory pension insurance. The reversal applies only going forward, and a second application is then impossible. The earnings threshold for marginal employment in 2026 is €603 per month.

Chancellor Friedrich Merz has invited key players to a high-level meeting on Wednesday. The responsible pension commission is expected to present its recommendations on June 29.