Chairman of the German Pensions Federation Alexander Gunkel announced the raise on Wednesday, but could not give details of how it would differ in different parts of Germany – especially between the former east and west.
There was good news for those still in work too, as the strong economy means contribution rates are set to stay stable until 2021 in current forecasts, leaving wage earners with more money in their pockets.
Gunkel added that he didn't foresee any problems for the pension system as a result of the large numbers of refugees arriving in Germany.
“As long as over time the refugees get jobs where they pay into the social security system, the extra contributions they pay could be a relief for the pensions system,” he said.
He added that it was difficult to forecast the effect of the influx given the scarce data about refugees' levels of qualifications.
The large, one-off raise in pension payouts is due to a change in how average wages are calculated, which meant the 2015 increase, of 2.1 percent in the west and 2.5 percent in the east, was smaller than it ought to have been.