The underestimated injustice in the pension system: When the welfare state principle becomes a farce

Germany’s statutory pension system is celebrated as a cornerstone of the welfare state: a solidarity-based model designed to provide security in old age and uphold the constitutional principle of social justice. Yet beneath the official narrative of intergenerational fairness lies a profound and largely ignored structural flaw that systematically disadvantages the poorest members of society.

A Lifetime of Contributions, a Shortened Lifetime of Benefits

For millions of low-income workers, a working life is marked by physical strain, precarious employment, shift work, health problems, and constant insecurity. They pay pension contributions for decades—often under the most difficult conditions—yet many never live long enough to draw a meaningful pension. Illness, disability, or early death frequently end their careers before they reach retirement age. Those who do make it often enjoy only a few years of retirement before passing away.

Statistically, life expectancy in Germany correlates strongly with income and education. The higher the social status, the longer people live; the lower the status, the earlier they die. This gap has been widening for years. As a result, poorer contributors subsidize the longer retirement periods of wealthier, longer-living citizens—without ever receiving comparable benefits from their own contributions.

Redistribution from Bottom to Top

The pension formula ties benefits strictly to the amount and duration of contributions paid, not to the length of time someone is likely to draw a pension. In practice, this creates an upside-down redistribution: money flows from those who die early to those who live longest. The contributions of people who never reach retirement age or who die shortly afterward remain in the system and help finance the pensions of healthier, wealthier retirees who often enjoy decades of payments.

Far from correcting social inequalities, the current system cements and even exacerbates them.

Raising the Retirement Age: Punishing the Most Vulnerable

Recent and planned increases in the statutory retirement age make the injustice even more glaring. The very groups with the lowest life expectancy—manual workers, people in physically demanding or stressful jobs, and those in precarious employment—are required to work longer before they can claim benefits. For many, the higher retirement age simply means they will pay contributions until they drop, without ever receiving a pension. Under the banner of “sustainability” and “fairness for younger generations,” reforms disproportionately burden those who already have the least reserves of health and strength.

Ignoring Reality: No Adjustment for Shorter Lives

Despite abundant data on diverging life expectancies, the political and institutional debate largely ignores the issue. There is no mechanism to compensate people with lower life expectancy through higher monthly pensions, earlier retirement options for particularly strenuous occupations, or credits for biographical hardship. The system continues to calculate on the basis of an abstract “average citizen” that does not exist for the poor.

A Violation of the Constitutional Promise

Article 1 and Article 20 of the German Basic Law oblige the state to protect human dignity and establish social justice. A pension system that takes decades of contributions from the poorest while granting them little or no old-age security manifestly fails to meet this obligation. Instead of cushioning existential risks, it deepens them. Instead of reducing inequality, it institutionalizes a transfer from the bottom to the top.

Time for Fundamental Reform

As long as the pension system refuses to acknowledge different life expectancies and the real burdens borne by low-income workers, it will remain a powerful engine of social division rather than social justice. Targeted reforms—such as life-expectancy-adjusted pension factors, expanded recognition of hardship periods, or fairer early-retirement rules for physically demanding careers—are overdue.

Without a fundamental recalibration that finally puts the welfare of the weakest contributors at its center, Germany’s proud claim to be a social state will remain an empty phrase for millions of its citizens. The pension system must stop punishing the poor for dying early and start fulfilling its original promise: dignity and security in old age for all who have spent their lives building this country.