45 years of toil: So little remains of your pension

The level of pensions is falling, and many are at risk of poverty in old age.

What's left of life?

What does the new form of company pension bring.

The facts at a glance.

The pension as a guarantee for a carefree old age?

That was once - in the future even average earners of retirement age are threatened with going to the social welfare office.

Every second person currently earns less than 2,500 euros a month.

The Verdi union calculates that many of these current employees will fall below the basic security level in the future.

This means lowering the pension level for future pensioners:

How much is the pension level falling?

This depends, among other things, on the labor market situation and the age structure of the population.

In the 2015 pension insurance report, the federal government assumed that the pension level would fall to just 44.3 percent by 2030.

That means: An average pensioner gets 44.3 percent of what an average employee earns.

The value is currently 47.9 percent.

In the worst case, there is a threat of a drop to 43 percent by 2030 – from this point the legislature would have to act.

But: There is no longer a lower limit for the period after 2030!

Why is the pension level falling?

This was a political decision to finance pensions in the long term.

Employees should pay for the pension gap out of their own pockets and provide for it privately - for example with the state-subsidized Riester pension.

But those who only expect a mini-pension when they retire have no money left over in their working lives to save for retirement.

In addition, employers are excluded from the Riester pension.

Unlike the statutory pension, you do not have to participate.

What does that mean for the individual?

With the statutory pension alone, it will be difficult for most to maintain their standard of living.

An example: Whoever – like half of the Germans – currently earns 2,500 euros can easily come close to receiving social assistance in old age.

Today, after 45 years of contributions, you would get a pension of EUR 1,009 - with a pension level of 43 percent, only EUR 906 net pension remained, i.e. after deduction of eleven percent social security contributions. 

The pension is only just above the basic security level of currently 795 euros.

With fewer years of contributions - especially for women - the Hartz IV level is practically unavoidable, according to Verdi boss Frank Bsirske.

His union is campaigning for a strengthening of the statutory pension with the Good Wages – Good Pension campaign week.

Bsirske: "If more and more employees pay into the pension insurance for the rest of their lives and then get more or less only basic security in old age - just like those who have never paid in - then that massively contradicts the sense of justice." 

This is how the falling pension level affects: How much pension comes out depending on the current earnings

The pure percentage is abstract - that's why we have calculated for you how the falling pension level will affect you in euros.

The average gross income required to achieve the “basic pension” of EUR 1,370 this year is EUR 37,103 per year.

The values ​​indicate the gross pension (without deduction of eleven percent social security contributions).

So read your current earnings on the left and the pension you can expect on the right.

*Contribution assessment limit currently at 76,200 euros gross

Postman works council: "How should we also make private provisions?"

When Domenico Cavaliere talks about retirement, his forehead wrinkles with concern.

The 58-year-old is a works council member at the post office in Munich and knows the worries and needs of the deliverers.

"Honestly,

" says Cavaliere.

This means that for most mail carriers, a pension cut through the back door is inevitable – because retirement at 67 means severe deductions for those who retire earlier.

The declining pension level is also causing problems for the Postal worker, especially since most of the colleagues could not afford private provision.

"If you already have so little to live on, how are you supposed to make private provisions?" Cavaliere asks himself.

Works council man calculates: That's how difficult it is for postmen

He does the math: after 40 years of service, a deliverer does not even come close to the average salary, even in the final tariff level.

He should expect a gross pension of just 1,004 euros today.

Eleven percent of social security contributions for health and nursing care insurance are deducted from this before taxes, leaving 894 euros in the end.

Cavaliere: "How are you supposed to make a decent living from this in Munich?"

After all, the post office offers a company pension – but with 180 euros net per month it cannot close the gap.

Here Cavaliere would like more commitment from the employer.

"The Post is a great company - but

" he demands. He can't understand why there shouldn't be any money for it - he uses Post boss Frank Appel as a key witness: his 16 years at the post office a pension commitment of 18.6 million - the equivalent of a monthly pension of 10,000 euros. There should also be something more in it for the employees."

+

17.7 million employees have company pensions, and the trend is falling

© picture alliance / dpa

Retirement provision: This type is only worthwhile if the boss plays along

The pension level is falling.

Anyone who wants to maintain their standard of living in old age must therefore make private provisions – for example with a company pension.

The federal

.

But is that enough to really make the company pension more attractive?

The experts argue about that.

Stiftung Warentest comes to the conclusion that a new contract is worthwhile – but only if the boss contributes something.

How it works?

Here are the facts summarized:

The new law in the test: what does the company pension bring?

• What is the company pension?

Not a pension from the company, as one might think, but

.

The employer selects an offer from the insurance industry and passes on the contributions that the employee pays from their gross salary by deferred compensation.

So far, depending on your income, this

.

According to Stiftung Warentest, however, it can be worthwhile if the boss contributes something.

• When does the boss pay?

17.7 million employees in Germany already have a company pension plan.

In many cases, employers already pay a subsidy, but

now their share - at least 15 percent of the contribution - is mandatory

!

From 2018 initially in sectors where employers and trade unions conclude a company pension collective agreement.

From 2019 also in all other sectors.

And from 2022, employers will also have to contribute 15 percent of the contribution for old contracts.

Incidentally, it's not about a treat from the boss, because thanks to the new "Company Pension Strengthening Act" he saves the contributions for social security - and thus currently significantly more than 15 percent.

• Who (also) pays, creates?

with which insurance company your company concludes a contract for the company pension

.

Unfortunately, he can do a lot wrong.

Stiftung Warentest shows that, depending on the tariff, the guaranteed monthly company pension for a 40-year-old (who invests 100 euros of his gross monthly salary in the company pension scheme for 27 years) is between 88 euros (Volkswohl Bund) and 113 euros (Europe). can.

If our example person can enjoy his pension for 20 years, the 25 euro difference adds up to 6000 euros.

• Does the company pension also have disadvantages?

While you benefit from tax advantages and savings on social security contributions during the savings phase, the tax office hits you hard when you retire.

Company pensions must be fully taxed.

You also pay the full health and long-term care insurance contributions. 

It is also bitter that the statutory pension is lower because no pension contributions are paid on the portion of the gross salary that goes into the company pension scheme.

This means that

• Conclusion from Stiftung Warentest:

The balance sheet for a single high earner (see example) is sober.

Of the 107 euros monthly pension guaranteed by one of the test winners, he was left with only 67 euros.

Provided he is a compulsory member of the statutory health insurance fund.

If he is voluntarily insured, it is only 47 euros.

And he paid around 51 euros/month net for this in the contribution phase.

Warentest therefore advises to

!

You should show your boss these insurance offers

The amount of your company pension depends on how well your boss negotiates with the insurance company.

.

The following offers are independent of the number of employees - and according to Stiftung Warentest, they offer the best that can be found on the market in this area.

Calculation for a 40-year-old employee who invests 1,200 euros from his gross salary in direct insurance annually for 27 years.

Source: Stiftung Warentest