Volkswagen and the IG Metall trade union have agreed a new early retirement scheme, under which certain workers could stop working at just 58.5 years old. The move will pave the way for a major reduction in the size of its workforce, reported the Financial Times.

The announcement comes at a time when the rest of Germany is preparing for an increase in the basic retirement age to 67 years old, a measure, which the German government is aiming to bring into force from 2029.

Up to 13,000 employees out of the 100,000 that work in Volkswagen's six plants in the west German states could be eligible for the scheme.

According to the news agency dpa-afx, the scheme combines existing measures at Volkswagen for part-time working for elderly workers, designed to ease them into retirement, and new measures that have come into force as a result of recent pension reforms. These measures allow those with at least 35 years social security payments to retire at 62.

Volkswagen was one of the first German companies to launch a long-term working time savings plan in the late 1990s, whereby workers can work longer hours when they are younger and bank those hours to work fewer hours when they are older.
 
Volkswagen employees taking up the new early retirement offer would stop work at 58 or 59 years old, and receive 85% of their net salary until they reach 62 years old, at which point they would retire fully.