German Pension Contribution Rate Projected to Reach 19.7 Percent in 2028

Germany’s statutory pension insurance system is facing a significant increase in contribution rates starting in 2028. The contribution rate is expected to rise to 19.7 percent of gross wages, up from the current 18.6 percent. Anja Piel, chairwoman of the federal board of the German Federal Pension Insurance (Deutsche Rentenversicherung), announced the projection on Tuesday during a meeting in Würzburg.

The projected adjustment follows a decline in the financial reserves of the pension fund. By the end of 2027, the system's sustainability reserve is expected to drop to near the minimum level prescribed by law. Piel stated that maintaining the current 18.6 percent rate through 2027 will only be possible by continuing to draw down these existing reserves.

According to Piel, an increase in 2028 would mark the first time in more than 20 years that statutory pension contributions in Germany have been raised. The figures align with calculations from the official pension insurance report published in early November.

The insurance fund faces mounting structural strain from demographic shifts and broader economic conditions. Alexander Gunkel, co-chairman of the federal board representing employers, warned that the system expects to lose a six-figure number of contributors over the coming years. Gunkel said this contraction will intensify the financial burden on the pension system.

At the same time, pension payments are projected to rise in the near term. According to official forecasts confirmed by pension insurance president Gundula Roßbach, statutory pensions are scheduled to increase by 4.1 percent in July 2027.

Written by Andreas Hofer andreas.hofer@alpineweekly.com