The question of retirement cuts to the heart of our social cohesion. Pensions are not some number in the budget, they are at the heart of our social contract. This is a promise to those older who have worked hard all their lives, but it is also a promise to those younger that their future will not be overshadowed by heavy burdens. But this promise is in danger. Demographic developments, economic challenges, changes in the realities of life – yes, in the end there are many unresolved problems when viewed from various perspectives, culminating in this debate. From here we must formulate a political mandate to take action. This is the moment on our agenda.
The numbers speak for themselves. As the baby boomer generation retires, the number of workers funding the pension system is shrinking. Therefore, addressing pension reform is a matter of intergenerational justice – and a matter of intergenerational solidarity. Many of us are parents or grandparents. Many people tell me that this is the question that concerns them. They don’t want their children and grandchildren to one day be faced with the wreckage of an overburdened pension system. Therefore, we all have the right to build our pension system in a sustainable manner, with solidarity and a solid foundation.
Representative democracy in the Federal Republic thrives on stable majorities through compromise – this is self-evident. That’s why Democrats need to talk to each other. Avoiding discussions with people considered “Basta”, as the SPD is currently trying to do, is counterproductive and inappropriate for the political center. The current debate should also be based on a common and honest understanding of the initial situation: Nobody is demanding pension cuts. And anyone who suggests in this debate that pension cuts are coming is being dishonest. Pension guarantees are legally provided for in SGB VI in the so-called “protection clauses”. Therefore, reducing the nominal value of pensions is not possible.
A compromise was agreed in the coalition agreement, namely setting the pension level at 48 percent by 2031. However, at the insistence of the Social Democratic Party, the draft law now submitted to the Bundestag goes beyond that limit and carries follow-up costs of around 120 billion euros. The United Young Group is free to criticize the costs of this follow-up. However, the political impact of this project is at least as significant as its costs: every early decision made in the pension field currently hinders reform options and compromises regarding much-needed major pension reform.
In the coalition agreement, the EU and the SPD recognized the need to reform the system and therefore agreed to establish a pensions commission. But this commission now needs clear political leadership and mandate, which must be made a top priority by coalition leaders – a large national generation commission. Because in the end there must be not only recommendations, but also a political majority. And no later than early summer 2026, because time is of the essence.
The task is enormous. Because at its core it is about the new generation of contracts. It’s about mutual respect between generations. The older one has the right to reliability, the younger one has the right to the ability to plan and creative freedom in the future. For this to work, honesty with others is required. And this requires us to continue to prioritize performance principles. Because performance must be valuable – even in retirement. After a lifetime of full-time work, the gap to basic income should be quite large.
Without a strong economy, there will be no strong pension funds
But let’s not kid ourselves: even the best retirement formula won’t help much if our economic base is crumbling. Without a strong economy, there will be no strong pension funds. Only when people start businesses, invest and innovate, when good jobs are created and wages rise, will the wage bill from which pensions are funded rise. That’s why any honest pension reform includes a real growth and modernization agenda for the country: fewer shackles for medium-sized businesses and industry, faster planning and approval procedures, better conditions for investment in energy, digitalization and research.
In Baden-Württemberg today I am working with the trust agenda to ensure that we move forward again with the same spirit. Complete necessary reforms, remove obstacles, create freedom, and unleash our mighty power again. High levels of exports, innovative strength in key technologies such as artificial intelligence, biotechnology, medical technology, robotics, and automotive and mechanical engineering make our country a strong part of the German economy.
We have proven once in this century that we as a Federal Republic are capable of meeting great challenges if we act boldly. Gerhard Schröder and the SPD Agenda 2010 were reforms that returned Germany to the path of economic crisis. At that time, determination from the political center was needed. However, this was later canceled partly due to a lack of political unity. Now the political center needs determination again – and unity to endure through generations to ensure long-term stability, prosperity and justice. Reform is not the final goal, but is our responsibility for the future.
As the center of democracy, let us mobilize all our strength and will to carry out reforms into the National Generation Commission and work together for our new generation contract.
Manuel Hagel is the leader of the CDU’s parliamentary group in Baden-Württemberg and is running for Prime Minister in state elections in March 2026.
