Company pension
A statutory old-age pension is safe, but certainly not enough. Hardly anyone can dispute their retirement with the retirement from the state alone. Whoever has to do it, is often poor. That is why the idea of three pillars of retirement provision has become established. They consist of legal, private and occupational pensions. Each of these three pillars has its own history, and each apply specific rules and tax rules. This is about occupational pensions” (bAV).
Have you already set up a scheme? That is good! But do not forget to check the supply from time to time and adjust it if necessary. It often makes sense to outsource operational pension obligations to an external carrier. We will advise you and your company on the details.
-Yesterday Occupational pensions, sometimes called “pensions from the boss”, is not a new invention. Already in the late Middle Ages there were first supply plants for miners. With industrialization in the 19th century. At a century, workers of large corporations such as Krupp, Siemens and BASF also benefited from operations. However, it was not until 1974 that the legal framework was made binding with the company pension law.
Today Today, more than half of all employees subject to social security contributions have claims from a company pension. Employees in large companies as well as in important and trade union well-organised industries such as the metal and chemical industries are best supplied. In small businesses, however, the pension from the boss is often still in short supply. Every employee has been entitled to dispose of schemes since 2002 – at least if they are financed by the contribution from his income (“deequal compensation”). However, although the company offers many advantages, for example tax funding, not everyone is making use of it.
-Who pays the company's company? In the classic variant, the employer takes over the contribution effort. He thereby assumes social responsibility and increases his chances of finding suitable employees and retaining them in the long term. In the event of decant conversion, the employee finances his supply by using part of his gross income for the provisions of the company. Of course, mixed forms are also possible. The employer can, for example, bring saved wage costs into the care. This is even mandatory for contracts that have been concluded since 2019. Some collective agreements also allow capital-generating benefits to set up a company pension scheme.
-More for the money For employees, deferral compensation is also worthwhile, because they save taxes and contributions to social security during their working lives. Only the later benefits will be taxed. Then the individual tax rate is usually lower than in active time. If the employee finances his contract, he does not take any risks: from the beginning he has a lost right to the benefits.
-Forms of supply (“channels”) The law has known five different forms of company company since 2002 (“channels of implementation”). Each has its advantages and special features. In 2018, the company pension strength law has added a sixth route of implementation. The appropriate insurance options are hard to be found so far. The individual consultation shows which form of the bAV is most suitable for you. If you want to get an overview of the possibilities in advance, simply continue reading. In the following we present the channels of implementation.
-Direct insurance Direct insurance is the best-known variant for company pensions and is also the most widespread. Smaller and medium-sized enterprises in particular have decided to do so. The company assures the employee who is beneficiary from the contract. The entitlement to benefits becomes less than if the pension commitment exists for at least three years and the employee is 21 years or older. The preferential maximum contribution depends on the contribution assessment limit in the statutory pension insurance and remains tax- and social security-free. The later benefits must be taxed. Survive benefits and benefits can also be insured with occupational disability as part of direct insurance. We are happy to determine your individual possibilities and benefits together with you.
-Pension fund The pension fund is a legally independent company. Employees and their survivors have a legal right to the promised benefits. As part of the tax limits, the contribution can be flexibly adjusted at any time. The pension fund pays the services directly to the beneficiary. If the contribution has been paid tax-free, the later benefits are taxable. Here, too, survivors and benefits can be insured in the event of occupational disability.
-Support fund In the past, only larger companies have established their own support fund. Meanwhile, there are also inter-company support funds, which small and medium-sized enterprises can join. The employer joins the support fund and gives the employee a pension commitment. Services are due on the basis of a so-called service plan. The employee does not have to pay taxes on the contributions during his active career. Only the later services are taxable.
-Direct commitment/pension commitment In the case of a direct commitment, the employer promises the employee a care. Later he pays the benefits directly to the beneficiary or his surviving houses. In principle, therefore, no external supply providers are involved here. Nevertheless, the company can outsource non-operational risks to an insurance company. In these cases, a cover-in insurance is taken out.
-Pension funds The pension fund was only introduced in Germany in 2002 as the fifth way to implement the company of the company. This is a legally independent pension facility that advises employees and their relatives to benefits. As with the pension fund and direct insurance, employees can provide contributions within defined limits within defined limits (deductive compensation). Pension funds offer the opportunity to invest in promising investments such as equities.
-Company pension strength law and social partner model The state promotes the spread of occupational pensions. But the supply is still behind expectations. In order to reach even more employees and their employers, the Occupational Pension Strengthening Act came into force in January 2018. In particular, it is intended to ensure that employees in small and medium-sized companies are more precautioned through operations more often. Numerous incentives have been created for this. These include the extension of the tax benefit and funding for low-sized earners (income up to EUR 2,575 per month) through tax subsidies to the company. In addition, the Riester base was increased from 154 to 175 euros per year and the obligation to pay contributions in the health and long-term care insurance of pensioners ("double contribution") is eliminated for Riester contracts. For direct insurance, pension funds and pension funds, the following applies: If the employer saves social security contributions through dew compensation, he has had to pass on his advantage with a lump sum of 15 percent as a grant to the contribution since 2022. This obligation has been in force for newly concluded contracts since 2019.
-Social partners The social partner model is an important part of the company pension strength law. It provides that regulations on provisions on provisions in collective agreements are agreed. The new contracts do not know any guaranteed services and offer higher return opportunities. This is therefore the employee alone bears investor risk. The social partner model is another way to implement, alongside the existing five models. It has to first conquer its position in the market.
-Information for workers Company pensions are worth it. It also helps to afford the retirement earned. Since 2002, employees have even had a legal right to dispose of provisions. This also applies to part-time forces and slight employees. Your employer takes over the processing and is a contractual partner. He also forwards the contribution, regardless of who finances it. Many employers participate in the contribution. Since 2019, this has even been mandatory for new contracts - as far as employer saves social security contributions. This regulation has been applicable to existing contracts since 2022. In some sectors, companies have previously committed themselves in collective agreements to pay a grant to the company pension scheme of their employees. In the event of parental leave or a longer illness, you can continue your company care from your own resources. In these cases, you should use our advice beforehand. As a rule, you can take the claims acquired from a previous employer to the new boss. In the event of the employer's insolvency, your company pension entitlements are protected and will not be lost even in the case of bankruptcy of the employer.
-Information for employers A company pension scheme is worthwhile – not only for your employees, but also for your company. It helps you looking for new employees and helps to retain the existing ones more closely with your company. The company is therefore an effective instrument against the labour shortage of today. It helps you to strengthen your attractiveness as an employer. In addition, you live up to your social responsibility towards your employees. Apart from this: Employees also have a legal claim to occupational pensions if they finance the contribution themselves ("decessation compensation"). Company pension can be outsourced. Then the administrative burden decreases and often goes towards zero. In addition, the company can be shaped neutrally balance sheet. If you grant a low-income workforce ("currence earners", up to 2,575 euros per month), you will receive a tax subsidy from the state. If compensation is agreed, the employees carry the economic expenditure alone. Employers only need to pass on their social security savings. This applies to new contracts since 2019. The requirement has been in place since 2022.