Germany’s pension overhaul could boost inflows by €90B, Apollo estimates

Germany just greenlit the most sweeping pension reform it has seen in over 20 years, and the numbers attached to it are staggering. Apollo Global Management estimates the overhaul could pump an additional €90 billion ($105 billion) in annual inflows into the country’s three-pillar pension system once fully implemented. To put that in perspective, Germany’s federal pension subsidies hit €118 billion in 2024, consuming roughly a quarter of the entire federal budget. The reform is designed to stop that fiscal bleeding before demographics make it terminal. What the reform actually does Chancellor Friedrich Merz endorsed a comprehensive reform package on June 23, 2026, containing 33 separate measures. The centerpiece is a new mandatory capital-funded pension pillar modeled on Sweden’s system, which requires 2% of gross wages to be invested in capital markets, with costs split between employers and employees. That 2% figure doesn’t arrive overnight. The contribution starts at 0.5% and phases up to the full 2% by 2031, giving companies and workers time to adjust. Apollo’s analysis attributes €30 billion of the projected €90 billion annual increase specifically to these new statutory contr...