As of: February 11, 2024, 9:57 a.m
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Most people will also have to make private provisions for old age.
But what many people don't know is that the state and employers help you save.
Munich – Nobody wants to tighten their belts as they get older, but the statutory pension is not enough for many people.
An additional company pension plan (bAV) can provide more financial security.
This is because employees are allowed to build up an additional pension through the company.
They agree with the boss that part of their gross salary will flow into a pension contract - direct insurance, pension fund or pension fund.
More pension: bonus from the company
This right to deferred compensation is anchored in law.
Even trainees and mini-jobbers who pay into the statutory pension fund are entitled to this.
The company must contribute at least 15 percent of the savings amount to building up the company pension.
Bonus from the state
Employee savings contributions are deducted from their gross salary.
So you save taxes and social security contributions.
Although they receive slightly less net wages, higher contributions are made to the company pension scheme, which therefore grows more quickly.
You can pay in up to 604 euros a month tax-free.
302 euros remain exempt from social security contributions.
Companies also pay less for pension, health, nursing care and unemployment insurance - around 20 percent of the converted amount.
They have to put this financial advantage into their employees' company pension plans: a subsidy of at least 15 percent is mandatory - for old and new contracts.
Some bosses also pay a higher allowance.
It's worth asking.
The more you contribute financially, the more likely it is that the company pension will pay off for employees.
If companies pay between 240 and 960 euros annually into the company pension plan for low-income earners - with a monthly salary of up to 2,575 euros - the state pays 30 percent of this.
An additional company pension plan (bAV) can provide more financial security.
(Archive image) © Marina Beilina/imago/Symbolbild
Company pension provision: profitability
“If employers finance the company pension alone or make a significant contribution to it, the company pension plan is worth it,” says Klaus Stiefermann, managing director of the Association for Company Pension Plans.
If employees pay a large part of the contributions themselves, you have to calculate whether the pension model offered generates enough returns - it should be at least two percent after deducting costs.
However, the long phase of low interest rates often made insurance-based provision via direct insurance and pension funds unattractive.
The guaranteed interest rate is just 0.25 percent.
In order to enable higher returns, the pension guarantee and the associated employer liability should be eliminated in the future if the collective bargaining partners agree on this.
The first offers as part of such a “social partner model” invest savings contributions in high-yield pension funds.
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Payout
More returns are also needed because company pensions are taxable in old age.
The personal tax rate is crucial.
Those with statutory health insurance also pay the full contributions to health and nursing care insurance - including the employer's share.
An average of 19.7 percent.
In order to relieve the burden on compulsorily insured company pensioners, monthly payments of up to 176.75 euros are excluded.
Anyone who only expects a small statutory pension will benefit from a company pension scheme.
High earners who convert their salaries should calculate how much they will save on taxes and social security contributions compared to the later deductions.
Gross savings also reduce the statutory pension.
distribution
Over 53 percent of employees receive a company pension in old age.
However, almost half do not have a company pension plan - especially young people, women and low earners.
The spread depends heavily on income, as companies use company pensions to recruit employees.
They attract specialists and managers with attractive pension plans.
Tailor-made offers for all parts of the workforce are much rarer - especially in small and medium-sized companies.
They often take out life or pension insurance for their employees, known as direct insurance in company savings terms.
If many people take part, insurers offer cheaper group rates.
Some large companies maintain their own pension funds, such as pension funds, or offer savings through pension funds, which are allowed to invest a larger portion of the money in stocks and thus achieve higher returns.
The employer decides which company pension model it offers and negotiates the scope of benefits.
A survivor's benefit or pension payment in the event of occupational disability can also be agreed with many insurers, such as Debeka or Canada Life.
BY SIGRUN AN DER HEIDEN