Company pension schemes – there are different forms
Created: 04/20/2022, 15:44
By: Janine Napirca
Pension fund or pension fund?
There are a number of options when it comes to company pension schemes.
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The company pension scheme is a company pension.
You can find out what forms there are here.
More and more people are thinking about retirement
early on
.
This is also extremely useful so that you do not face
poverty
in old age later in retirement .
In this case, you may be entitled to a basic pension*.
One form of pension is the
company pension scheme
.
According to a report by the
United Income Tax Aid (VLH)
, there are five different models, one of which is the pension fund, for example.
You can find out here which other forms of company pension scheme your employer can choose from.
How does the company pension plan work?
According to the report by the United Income Tax Aid, the company pension scheme is a
voluntary supplementary pension
that is intended to provide financial support to pensioners in old age in
addition to the statutory pension
.
Since 2022, as an employee and member of the statutory pension insurance, you have been able to divert part of your gross salary directly for the company pension scheme.
This procedure is called
deferred compensation
.
All employees are legally entitled to a company pension scheme.
In contrast to the Riester pension, the employer usually chooses the model for company pension schemes, according to the report.
In addition to old-age provision, many company pension schemes also
cover disability
or
death
with the company pension.
Since 2018, all employees have automatically taken part in deferred compensation.
If you do not want this, you must
actively object to
it .
Be careful with collective agreements
If you are paid collectively, your salary can only be converted if your collective agreement expressly allows it.
There are five different forms of company pension schemes
Employers can choose between five different models of company pension schemes for employees:
Direct insurance
: Life or pension insurance - the employer transfers part of the salary to the insurance company every month, the money earns interest
Pension fund
: independent pension institution, is often founded by one or more companies, the money is safely invested in a pension insurance, for example
Provident
fund: also an independent pension scheme, which is often founded by one or more companies. In the event of the employer's insolvency, you are covered by the Mutual Pension Insurance Association (PSVaG).
Pension fund
: in contrast to the pension fund, pension funds can also invest the money in listed investments - the chances of return but also the risk are higher, in the worst case you only receive the paid-in capital, in the best case a significantly higher monthly payment
Direct commitment
: the employer promises you that you will receive a previously agreed benefit when you reach retirement age and makes provisions for it yourself and invests the money. If you leave the company, the direct commitment cannot be continued with private amounts
Source: United Income Tax Assistance
Please also note that you have to pay tax on the company pension scheme in old age.
You can read here when there is double taxation of the pension.
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