Partial Retirement (Altersteilzeit): The Block Model Is Up for Review
- Jul 23
- 2 min read
The German federal government has announced that it will implement the reform package of the pension commission (Alterssicherungskommission) in full, and within this year. One aspect directly affects HR practice: partial retirement (Altersteilzeit) is to be available only from age 58 instead of 55. In addition, the block model (Blockmodell) is to be abolished entirely. Anyone considering partial retirement under the block model will probably have only this year left to do so.
1. The commission's recommendation on partial retirement
The commission, set up in January 2026, proposes two changes in recommendation no. 13. First, the minimum age rises from 55 to 58; in the longer term, it is to be linked to the statutory retirement age (Regelaltersgrenze), which under the further recommendations is to rise gradually from 2031 to 67.5 years by 2041. Second, partial retirement under the block model is no longer to be permitted.
None of this is law yet. However, the Chancellor and the Federal Minister of Labour have declared their intention to adopt all of the proposals, and to do so swiftly.
2. Abolition of the block model
Under the German Partial Retirement Act (Altersteilzeitgesetz, ATG), employees halve their working time; the employer tops up the reduced pay with supplements that enjoy tax and social security privileges and pays additional pension contributions. In practice, this is predominantly implemented as a block model: several years of full-time work first, followed by a release phase until retirement.
The commission wants to scrap this model because the release phase comes close, in economic terms, to early retirement and thus contradicts the declared goal that people should leave working life later. If only the genuine part-time model with half the working time throughout remained, partial retirement would lose much of its current appeal: companies use the block model as a plannable instrument for restructuring and succession situations, employees as a reliable bridge into retirement with a fixed end date.
3. Grandfathering for existing agreements
For block-model agreements already in place, there is much to suggest grandfathering. In earlier reforms, the legislator protected existing arrangements through cut-off date rules, for example in § 235 Abs. 2 S. 3 SGB VI (Book VI of the German Social Code) when the statutory retirement age was raised. This cannot be relied upon, however, and how generous any transitional periods will be remains open.
The situation is more critical for anything still to be concluded. There may be little time between the adoption of the law and the cut-off date. Collective bargaining agreements (Tarifverträge) and works agreements (Betriebsvereinbarungen) tailored to the block model or to a minimum age below 58 may also come under pressure to adapt.
Wondering whether partial retirement will still come in time for you or your company?
Whether it is still worth concluding an agreement this year, and how to structure it properly, depends on the individual case: on age, on existing collective and works agreements, and on how the legislator regulates the transition.
If you are thinking about partial retirement as an employee or executive approaching retirement, or planning block-model agreements as an employer, I offer you a brief, free initial assessment. In this conversation, we will clarify where you stand and which steps make sense now.
