The German Federal Cabinet has approved Rentenpaket II, the second phase of the pension reform plan.

Rentenpaket II aims to maintain the pension level at 48% of the average wage until 2039.

The plan introduces a Generation Capital fund through stock investments to alleviate future burdens on contributors.

Younger individuals will see slightly higher pension contributions but will benefit from a stable pension level until 2039.

The reform prevents a drop in the pension level to 44.9% in 2040.

At least €200 billion will be invested in stocks by the 2030s to support the initiative.

Critics argue that the burden on taxpayers will increase due to rising pension costs.

Supporters emphasize the importance of ensuring dignity in retirement.

The proposal is set to be fast-tracked through the legislative process and is moving to the Bundestag for further consideration.

The Bundesrat is expected to provide feedback in July.

The FDP, initially expressing concerns, now considers the Rentenpaket II finalized.

Individuals are encouraged to continue saving for retirement through private pension plans and stay informed about future developments in the pension system.