The federal coalition agreement introduces several measures that will affect your employees’ end-of-career planning. In this newsflash, we discuss the newly announced conditions for early statutory retirement.
Under the new measures, some employees will need to work longer, while others may retire earlier. These possible resulting shifts can significantly impact your planned workforce turnover, making it important to review and potentially adjust your staffing strategy and recruitment plans for the upcoming years.
Current conditions for early retirement
Currently, one can retire early at age 60 after 44 years of career, at age 61 after 43 years of career, or at age 63 after 42 years of career. A calendar year counts as a career year if an employee works at least the equivalent of 104 full-time days within that year. Saturdays are also considered workdays, making a full year comprise 312 workdays (52 weeks x 6 workdays). If an employee falls short by one or more workdays in a calendar year, it does not count as a career year for early statutory retirement.
For the self-employed, a minimum of 2 quarters per year is required.
Stricter career conditions from 2027
Only calendar years with at least 2 quarters (6 months or 156 days) will be counted. For employees, this means the threshold will rise from 104 to 156 full-time workdays.
Based on a strict application of this rule, this would mean that for an employee working half-time throughout the entire year and taking a few days of unpaid leave, the calendar year in question will no longer be counted under the new rules.
It is not yet clear whether there will be any leniency for the first year of a career. If not, young graduates would need to start working full-time as employees at the latest on July 1st (instead of September 1st, as is currently the case) and remain full-time employed until December 31st for their first year to count as a career year. Those who have completed their first career year obviously cannot do anything to increase the number of workdays in that year retroactively. Without leniency, for many, the first career year will no longer count.
There will be a transition period for those nearing early retirement. Those who already meet the conditions for early retirement in 2025 will retain the right to retire early. Those who are 60 years or older at the start of the new law (likely in 2025) will have to work a maximum of 1 year longer. Those who are 59 at the start of the new law will have to work a maximum of 2 years longer.
For people younger than 59 years old, the impact can be much more severe. For some, several career years may no longer be counted, potentially making it impossible for them to take early retirement.
At the same time, there will be an easing of the career conditions
Starting from 2027, employees will have the option to take early retirement from the age of 60, provided they have accumulated a career of at least 42 years with 234 days of actual work.
This benefits employees who began working early and consistently worked at least ¾ of a full-time schedule each year. The federal coalition agreement doesn’t specify how much earlier they can retire under this new rule. According to our interpretation of the text, it’s a maximum of 12 months for those born after August 31. For those born before September 1, this new rule may allow for retiring maximum 6 to 11 months earlier.
Understanding these legislative changes is crucial for aligning the end-of-career planning of your older employees with the needs of your business. Our pension experts can assist and guide you through this process.
