Shortly before the summer recess, the National Council decided to introduce a new partial pension scheme as from 2026. The aim is to counteract increasing pressure on the pension system, address the shortage of skilled workers and, at the same time, take into account the changing needs of older workers.
Eligibility requirements and general framework
From 01 January 2026, workers who already meet the requirements for any form of retirement pension will have an additional choice: they can use the partial pension option.
To be eligible for partial pension, working hours must be reduced by at least 25% and no more than 75%, as agreed with the employer. There is no legal entitlement. Work must in any event continue to be subject to compulsory pension insurance. This means that workers remain employed on proportionately reduced pay and continue to pay contributions into the pension system.
Calculation of the partial pension
The partial pension amount will depend on the extent of the working hour reduction and is calculated on a sliding scale based on the total credit balance in the pension account:
If working hours are reduced by 25 to 40%, the partial pension will amount to the equivalent of 25% of the pension credit balance.
Those who reduce their working hours by between 41% and 60% will receive 50% of the credit balance.
If working hours are reduced by between 61% and 75%, 75% of the credit balance will be paid as a partial pension.
The remaining portion of the pension account remains unaffected, continuing to accrue through continued employment.
Restriction on partial retirement
As the partial pension option is introduced, partial retirement will be restricted. In practical terms, the most important change is the planned reduction in the maximum duration of partial retirement from five to three years. Moreover, there will be no entitlement to partial retirement once the conditions for receiving a retirement pension are met.
If you have any questions about the new partial pension scheme, the restrictions on partial retirement or the practical implementation of a smooth transition to retirement, the KWR Employment Law team will be happy to assist you.
