Many com\u00adpa\u00adnies have been using the block model of par\u00adti\u00adal reti\u00adre\u00adment for years as a tried-and-tes\u00adted tool for soci\u00adal\u00adly respon\u00adsi\u00adble staff reduc\u00adtions. This could soon chan\u00adge fun\u00adda\u00admen\u00adtal\u00adly. On 2 July 2026, the coali\u00adti\u00adon com\u00admit\u00adtee agreed, on the recom\u00admen\u00adda\u00adti\u00adon of the Pen\u00adsi\u00adon Secu\u00adri\u00adty Com\u00admis\u00adsi\u00adon, to abo\u00adlish the block model of par\u00adti\u00adal reti\u00adre\u00adment. At the same time, the age limit for the remai\u00adning peri\u00adod of par\u00adti\u00adal reti\u00adre\u00adment is to be rai\u00adsed from 55 to 58 and, in future, lin\u00adked to the stan\u00addard reti\u00adre\u00adment age.<\/p>\n
Under the \u2018block model\u2019 of par\u00adti\u00adal reti\u00adre\u00adment, employees initi\u00adal\u00adly con\u00adti\u00adnue to work full-time or for the most part during one pha\u00adse of their employ\u00adment, and then move into a lea\u00adve-of-absence pha\u00adse of equal dura\u00adti\u00adon befo\u00adre reti\u00adring. Legal\u00adly spea\u00adking, this con\u00adsti\u00adtu\u00adtes par\u00adti\u00adal reti\u00adre\u00adment, not ear\u00adly reti\u00adre\u00adment. The model pro\u00advi\u00addes plan\u00adning cer\u00adtain\u00adty for both par\u00adties and is par\u00adti\u00adcu\u00adlar\u00adly popu\u00adlar during res\u00adtruc\u00adtu\u00adring pro\u00adces\u00adses, as staff reduc\u00adtions can be imple\u00admen\u00adted in a clear and pre\u00addic\u00adta\u00adble manner.<\/p>\n
Under the reform plans, only the so-cal\u00adled \u2018equal dis\u00adtri\u00adbu\u00adti\u00adon model\u2019 will be per\u00admit\u00adted in future. Under this model, working hours are redu\u00adced even\u00adly over the enti\u00adre peri\u00adod. Employees the\u00adr\u00ade\u00adfo\u00adre remain with the com\u00adpa\u00adny for the enti\u00adre dura\u00adti\u00adon, which signi\u00adfi\u00adcant\u00adly slows down staff reduc\u00adtions and is only of limi\u00adt\u00aded use for restructuring.<\/p>\n
Cri\u00adtics of the reform see signi\u00adfi\u00adcant impli\u00adca\u00adti\u00adons for work\u00adplace prac\u00adti\u00adce. This is becau\u00adse the need for res\u00adtruc\u00adtu\u00adring within com\u00adpa\u00adnies will not dis\u00adap\u00adpear sim\u00adply becau\u00adse the \u2018block model\u2019 is abo\u00adlished. Employ\u00aders may then have to resort more fre\u00adquent\u00adly to mutu\u00adal ter\u00admi\u00adna\u00adti\u00adon agree\u00adments or red\u00adun\u00addan\u00adci\u00ades on ope\u00adra\u00adtio\u00adnal grounds in order to redu\u00adce sur\u00adplus staff. Whe\u00adther this will actual\u00adly lead to older workers remai\u00adning in the labour force for lon\u00adger, as the Com\u00admis\u00adsi\u00adon expects, remains to be seen. It is equal\u00adly con\u00adceiva\u00adble that the\u00adre will be hig\u00adher unem\u00adploy\u00adment among tho\u00adse approa\u00adching reti\u00adre\u00adment age and more dis\u00adpu\u00adtes during res\u00adtruc\u00adtu\u00adring processes.<\/p>\n
The reform would have par\u00adti\u00adcu\u00adlar impli\u00adca\u00adti\u00adons for the social sel\u00adec\u00adtion pro\u00adcess under the Pro\u00adtec\u00adtion Against Dis\u00admis\u00adsal Act. Older employees with long ser\u00advice are gene\u00adral\u00adly par\u00adti\u00adcu\u00adlar\u00adly well pro\u00adtec\u00adted under the points-based sche\u00admes used for social sel\u00adec\u00adtion. Until now, such employees have been able to vol\u00adun\u00adt\u00ada\u00adri\u00adly tran\u00adsi\u00adti\u00adon to par\u00adti\u00adal reti\u00adre\u00adment, which redu\u00adced their num\u00adbers in the com\u00adpa\u00adri\u00adson groups in the event of red\u00adun\u00addan\u00adci\u00ades. Wit\u00adhout this opti\u00adon, more older employees will remain in the com\u00adpa\u00adri\u00adson groups, which may mean that employ\u00aders are forced to make more youn\u00adger staff redundant.<\/p>\n
This could prompt com\u00adpa\u00adnies to make grea\u00adter use of age-based groups in order to safe\u00adguard the age struc\u00adtu\u00adre of the work\u00adforce. Fur\u00adther\u00admo\u00adre, pres\u00adsu\u00adre is likely to increase to exclude cer\u00adtain employees from the red\u00adun\u00addan\u00adcy sel\u00adec\u00adtion pro\u00adcess on the grounds of their spe\u00adci\u00adfic know\u00adledge or skills. This will not only make the red\u00adun\u00addan\u00adcy sel\u00adec\u00adtion pro\u00adcess more com\u00adplex, but also more pro\u00adne to disputes.<\/p>\n
Many com\u00adpa\u00adnies and employees have alre\u00ada\u00addy based their plan\u00adning on exis\u00adting par\u00adti\u00adal reti\u00adre\u00adment sche\u00admes. Should the \u2018block model\u2019 be abo\u00adlished, the legis\u00adla\u00adtor would need to pro\u00advi\u00adde for com\u00adpre\u00adhen\u00adsi\u00adve tran\u00adsi\u00adtio\u00adnal arran\u00adge\u00adments. This appli\u00ades both to par\u00adti\u00adal reti\u00adre\u00adment agree\u00adments that have alre\u00ada\u00addy been con\u00adcluded and to ongo\u00ading res\u00adtruc\u00adtu\u00adring plans in which par\u00adti\u00adal reti\u00adre\u00adment is firm\u00adly incorporated.<\/p>\n
For com\u00adpa\u00adnies that are curr\u00adent\u00adly in the plan\u00adning stages or alre\u00ada\u00addy have exis\u00adting agree\u00adments in place, it is advi\u00adsa\u00adble to seek advice on employ\u00adment law at an ear\u00adly stage in order to keep abre\u00adast of fur\u00adther deve\u00adlo\u00adp\u00adments and to con\u00adsider opti\u00adons for action in good time.<\/p>\n