Keeping Employees Past Retirement Age: What Employers Should Regulate
Continuing to work beyond the standard retirement age: age-limit clauses, postponing the end date and new fixed-term hiring
The retirement age is being debated again: in June 2026 the Pension Commission (Rentenkommission) recommended linking the standard retirement age to life expectancy from 2032; a government bill has not yet been adopted. For companies the question already arises today how to retain experienced employees beyond the standard retirement age in a legally sound way.
The Employment Relationship Does Not End by Itself
The standard retirement age (Regelaltersgrenze) – the age for the regular old-age pension – is 67 for those born in 1964 or later (§§ 35, 235 SGB VI). Reaching it does not automatically end an open-ended employment relationship. Nor is entitlement to a pension a ground for dismissal under the Protection Against Dismissal Act (Kündigungsschutzgesetz, KSchG) (§ 41 Abs. 1 Satz 1 SGB VI).
Age-Limit Clause: Permissible, but Subject to Form Requirements
Many employment and collective agreements provide that the employment relationship ends upon reaching the standard retirement age. This is a fixed term, that is, an agreed fixed end of the contract. The Federal Labour Court (Bundesarbeitsgericht) considers it objectively justified if the employee can then claim a statutory old-age pension; its amount is in principle irrelevant (BAG, judgment of 9 December 2015 – 7 AZR 68/14). Such agreements are also in principle justified under the General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz, AGG) (§ 10 Satz 3 Nr. 5 AGG).
If a clause refers to an earlier point in time, it is regularly deemed, as against the employee, to have been concluded for the standard retirement age (§ 41 Abs. 1 Satz 2 SGB VI). Since 1 January 2025, text form, for example by e-mail, suffices for the age-limit agreement (now § 41 Abs. 3 SGB VI); written form is not required in this respect.
Route 1: Postponing the End Date
If an age limit has been agreed, the parties may postpone the end date during the employment relationship – even repeatedly – without objective reason (§ 41 Abs. 1 Satz 3 SGB VI). The Federal Labour Court considers this effective and compatible with EU law (BAG, judgment of 19 December 2018 – 7 AZR 70/17). The agreement must be made before the end date. Whether other working conditions may be changed at the same time has been left open by the court; such changes should therefore be regulated separately. Whether text form suffices for the postponement has not been conclusively clarified.
Route 2: New Fixed-Term Contract
Since 1 January 2026, employers may hire employees who have reached the standard retirement age on a fixed-term basis without objective reason even if they were previously employed by them (§ 41 Abs. 2 SGB VI); the prohibition of prior employment in § 14 Abs. 2 Satz 2 TzBfG does not apply in this respect. Each contract may run for a maximum of two years and be extended up to three times; in total up to eight years and twelve fixed-term contracts are possible. Written form applies here (§ 14 Abs. 4 TzBfG). A new contract allows tasks and working time to be redefined; a mere extension, by contrast, must take place without changes to its content.
Please clarify tax relief (the so-called Aktivrente, § 3 Nr. 21 EStG) with your tax adviser.
Practical Checklist for Companies
Review contracts for age-limit clauses and adapt templates.
Agree continued employment before the end date.
Choose deliberately: postponing (new end date only) or new contract.
As a precaution, conclude postponements and fixed terms in writing with the signatures of both sides; formal defects lead to an open-ended employment relationship (§ 16 TzBfG).
Involve the works council (companies with more than 20 employees entitled to vote): postponement, too, is a hiring requiring consent (§ 99 BetrVG; BAG, decision of 22 September 2021 – 7 ABR 22/20).
Conclusion
Current law offers flexible ways of retaining experienced employees beyond the standard retirement age. What matters is the right instrument and the right form. Please do not hesitate to contact us if you have any questions.
Status: 20 October 2026
NIETZER Rechtsanwälte · Attorneys at Law (USA) · Heilbronn · www.unternehmensrecht.com
This article is for general information purposes and does not replace legal advice in an individual case.
