Company pension scheme
The company pension scheme is a supplementary pension that employees can build up through their employer. It supplements the statutory pension and is intended to help maintain the standard of living in old age.
Looking safely into the future
Company pension scheme - what is it?
A company pension scheme is not only an important building block for financial security in old age, but also a powerful tool for employee retention and motivation. A company pension plan offers the security that your employees and you need for a carefree future.
Facts & Figures
FAQ on company pension plans (baV)
We have summarized the most frequently asked questions on the subject of occupational pension provision (baV) for you in our FAQ. Our experts will also be happy to provide you with individual advice.
Occupational pension schemes are important because the statutory pension is often not enough to maintain the standard of living you are used to in retirement. The occupational pension scheme allows employees to make additional provision for old age and benefit from tax advantages.
Employees and employers pay contributions into a company pension scheme. These contributions are often deducted directly from the gross salary (salary conversion) and invested in a pension fund, a pension fund, direct insurance, a relief fund or a direct commitment.
- Direct insurance: a life or pension insurance policy taken out by the employer on behalf of the employee
- Pensionskasse: a legally independent pension fund that provides pension benefits
- Pension fund: a legally independent pension fund that invests in shares and other securities
- Unterstützungskasse: a legally independent pension fund financed by the employer
- Direct commitment (pension commitment): The employer undertakes to pay the employee a specific benefit at retirement age.
The contributions to the occupational pension scheme can be paid by the employee, the employer or both together. They are often financed through deferred compensation, where part of the gross salary is paid into the occupational pension scheme.
The amount of the contributions depends on individual needs and financial possibilities. It is advisable to seek advice from your employer or a financial advisor to determine the optimum contribution amount.
Contributions to occupational pension schemes are generally exempt from tax and social security contributions up to certain maximum limits. This reduces taxable income and lowers social security contributions. However, the subsequent pension from the occupational pension scheme is taxable.
Yes, there are statutory maximum limits. In 2023, up to 8% of the contribution assessment ceiling of the statutory pension insurance (West) is tax-free. The exact amount can be adjusted annually.
The occupational pension scheme pays a monthly pension or a one-off capital payment at retirement age. The exact amount of the benefits depends on the contributions paid in and the return achieved.
As a rule, the occupational pension scheme can be taken out from the statutory retirement age. Some contracts also allow early payment, but often with deductions.
As a rule, it is not possible to terminate the occupational pension scheme, as it is a pension plan. However, it is often possible to suspend the contributions or suspend the contract.
If you change employer, you can usually take your occupational pension scheme with you to your new employer (ported) or continue it privately. The exact regulations depend on the implementation method and the contractual conditions.
Yes, occupational pension schemes are generally protected against insolvency. This means that in the event of the employer's insolvency, the accumulated assets do not fall into the insolvency estate and remain with the employee.
Yes, occupational pension schemes are clearly defined by the German Company Pensions Act (BetrAVG) and other statutory regulations. Among other things, these laws regulate the entitlements of employees and the obligations of employers.
Yes, it is possible and often makes sense to combine the occupational pension scheme with other forms of old-age provision such as the statutory pension, private pension insurance or Riester pension in order to ensure comprehensive old-age provision.
Further insurance solutions
In addition to company pension plans, we also offer numerous other insurance solutions that may be of interest to you.
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