Pensions in Germany

The term retirement encompasses all measures that someone hits during life, so that he in old age or after the end of employment ( this can also before the start of annuity payments are ) can deny his other living expenses, if possible, without restrictions of living standards. The pension plans are acquired vested rights to pensions and / or interest from angespartem assets.

• 5.1 State -funded pension 5.1.1 Riester pension
• 5.1.2 Rürup

• 5.2.1 Regular Savings Plan
• 5.2.2 real estate

History

Traditional retirement was for the family group and was for centuries by " kind " in the form of supply met (see eg her retirement ). The active and powerful generation had to supply both the younger and the aging generation in the composite of a large family. In such a social situation, the supply based mainly on the age of a sufficient number of children, to own house and / or agricultural land as well - for a small minority of the population - at a sufficient own assets. With the advent of industrialization and the increased geographical mobility on the one hand and simultaneous impoverishment of the population on the other hand, this task could increasingly not be solved in an acceptable manner within the family.

Starting at the 17th century first state pension systems for civilian employees of the state and military personnel have been established. In the 18th century developed in addition to the pension schemes for civil servants and occupational pension schemes. Finally, it was introduced in the late 19th century as part of the Bismarckian social legislation a legal disability (now purchase mitigation ) and old-age pension. The statutory pension was initially created as part of funded pension, but in the 20th century the capital stock built up was lost through two world wars, inflation and the economic crisis, so that the statutory old-age pension has been changed in the 50s to the PAYG system. The development of the last 150 years has led to the conclusion that the responsibility for retirement from the family unit and the individual to larger groups has (state, collective community of insured persons ) displaced. The recent changes in the age structure of the Company and other factors have led to the fact that since the 1990s, the individual responsibility for one's own retirement is emphasized more strongly.

General

Today's retirement in Germany is based on the so-called three pillars:

An alternative classification is the three -layer model that provides not the carrier of the pension, but tax issues to the fore:

Statutory pension

The statutory provision is based on the principle of distribution. The contributions paid are not saved, but used for pension payments to current retirees. Therefore, there is also not entitled to reimbursement of the contributions paid, but only to participate in the current revenue ( so-called vesting ). The young generation is thus for the retirement of the old generation (so-called generation contract ). This is based on the principle of solidarity. Because of the age pyramid in Germany and many other European countries, but in the future fewer and fewer workers to pay for the pensions of more and more retirees, which must lead to an increase in pension contributions or future benefit cuts if the current pension benefits should not be reduced.

From 2012, the retirement age for the year of birth 1947, increased by one month; for subsequent cohorts in each subsequent year by an additional month, until the year 1958 in 2023 can go to ( without deductions ) old-age pension with 66 years of age. The subsequent vintages have to reckon with an accelerated raising of the age limit by two months per year; thus, the full increase to 67 for the first time in 2029 effective for the year 1964. Each month the early use leads to a reduced pension of 0.3 per cent of the pension amount per year ie from 3.6 percent.

In 2030, according to a study by the Institute for Labour Market and Employment Research ( IAB) by the higher age and taking into account the population structure about 3 million additional contributors needed. At a higher level of early retirement in the present state about 1.2 million contributors are missing.

Politically advertised for additional private or company pension schemes, as the statutory pension cover in the future according to popular belief, only the basic needs, but not be able to secure the standard of living.

Officials, judges and professional soldiers do not pay their own contributions for retirement, but the salary of these persons is measured from the beginning lower than it would be appropriate for work of equal value in a socially insured employment relationship.

Occupational pensions

Occupational pension provision is when an employer to a worker on the occasion of employment granted a pension entitlement. The labor law aspects of occupational retirement provision ( formerly law to improve occupational pensions BetrAVG ) regulated in Betriebsrentengesetz. In addition, the company pension scheme is tax flanked to strengthen this type of retirement plan.

The pension law provides a right of the worker to a company pension through salary, thus abandoning future salary before. Since this variant brings tax benefits for employers and employees, it is becoming increasingly popular.

Occupational pensions can be performed in various ways.

The Company Pensions Act further stipulates the five permitted methods of implementation:

• Direct commitment
• Pension Fund
• Pension funds
• Provident fund
• Direct insurance

When choosing the way of effecting the employee has no choice in the rule. If, however, the implementation of a pension fund, a pension fund or a direct insurance and as deferred compensation, the employee has a right to insist that the contract meets the requirements of government allowances promotion.

A problem of occupational pensions may be the provisions for early termination of employment without the occurrence of an insured event. The possibilities to continue a pension commitment with a new employer ( portability ) - which means an acceptance of the obligations of the new employer - are, however, constantly improved by legislation. However, the claims, except for deferred compensation, after a certain period secured ( legally vested). In premature change so can the entire claim of the employee expired. The period for commitments, which were granted after 31 December 2000, five years. In addition, the candidate must be 30 years of age at retirement commitments at 31 December 2008 have reached the age of 25 since 1 January 2009.

The claim to power is ultimately always against the employer, even if an external implementation method was chosen ( piercing the corporate veil ). In the event of insolvency of the employer, the performance is guaranteed by the pension guarantee association. Pension funds and direct insurance ( in most cases) provide a legal entitlement, so that the association's duties in the event of insolvency regularly does not have to happen by itself.

Working-life accounts

On a working lifetime account an employee may pay overtime. These are then applied as the value and the worker reimbursed if this takes a longer time-outs, eg for training or to the retirement preferable.

A value account exists as a cash value account. Here, the operation has generally concluded a contract with an insurance company. The employee can then transfer salary components to the value account. The contributions paid are removed from the gross salary. Here also the social security contributions of the employer shall be credited to the account value.

The value account can be used besispielsweise for a sabbatical or for a parental leave. The employee receives amounts from the account value without the employment is terminated.

Upon entry into the pension the value account can be transferred to a tax-efficient pension. Upon termination or death i.d.R. is dissolved the special account and disbursed. Social security contributions are deducted. The paid up capital is taxed according to the fifth control ( as with severance pay).

The transfer value of the account on a pension is to be interpreted as content conversion and is therefore subject to maximum limits. If these are exceeded, it is a social insurance accident. Working-life accounts are therefore not suitable as a substitute for a company pension scheme, but to finance a premature retirement.

Private pension

The private pension scheme is based on the basic idea of the funded system. The paid up capital and the interest earned is therefore entitled to the savers. He can choose a lifetime annuity or lump-sum payment.

State -funded pension

Rrup and Riester pensions are created in the course of the last major pension reforms and will, among other things, the declining level of pensions benchmark pensioner compensate. These forms of retirement plans are subject to special regulations. This includes a state- sponsored retirement not mortgaged, may be sold or inherited or pledged. Exceptions are possible, for example, can be a Riester pension to a defined group of people inherit ( see letter (PDF, 655 kB ) of the Federal Ministry of Finance Az IV C 3 - S 2222/09/10041 v. March 31, 2010 ).

In addition, expected social security benefit if the policyholder should be in need in the course of his working life ( " Hartz IV Security" ), the state-sponsored pension funds are not on ALG II. The accumulated capital is used exclusively for the pensions of the saver. If in case of death no heiress spouse with their own Riester contract comes as heir in question, the state subsidies are to be repaid. The rest of the savings capital falls into the gene pool and how other property inherited.

Riester pension

The Riester pension is one of the better known forms of state-sponsored retirement plans (as of 3rd quarter 2011: 14.8 million ). For details, see main article Riester pension.

Rürup

When Rürup pension is a voluntary insurance that is primarily intended for self-employed and freelancers. But even high-income employees and officials can so make provisions for old age. Put simply, the Rürup pension may be worth for all persons who are not subject to social insurance contributions. See main article Rürup pension.

State not subsidized provision

State- funded pension contracts not enjoy no guaranteed continuance of the deposits. On the other hand, can be achieved with these forms of retirement savings and intergenerational wealth accumulation, since the saved capital is available and usually hereditary. Furthermore, the tax situation for Auszahlzeitpunkt play a role. Unlike the subsidized products, which provide a full pension taxation aged, non-subsidized products in the retirement age must be taxed only by the yield percentage.

Fund savings plan

A Fund Savings Plan is a savings contract in the regular money will be deposited and for fund shares are purchased. Since this form of investment receives no government funding, it is up to the investor, when and how he wants to have his fortune.

An investment in a fund savings plans is characterized by a high degree of cost transparency. Any costs (such as management fees or sales charges ) are documented in the price lists of banks, savings banks and mutual fund companies.

Real estate

The acquisition of property during the acquisition phase can help to maintain the standard of living in retirement. In letting the excess of revenue over costs must be taxed, which reduces the yield.

Real estate funds are another way to build capital to hedge the ages.

Retirement of the family labor

Who is not working fully or partly in order to devote himself to raising children or caring for relatives, receives very limited circumstances it own financial claims for retirement.

In Germany, § 249 and § 249a SGB VI, § 56, a limited number of years recognized as parenting time in the statutory pension insurance as contribution periods. Under certain conditions, are also times of the care of relatives contribution periods in the annuity.

For spouses and registered partners who are not consistently or were gainfully employed, it is assumed that a supply by the working partner. To sustain old age is an independent private pension plans of increasing importance for this group of people. If pension splitting was chosen because of a divorce or a quasi -splitting was carried out, there is an independent claim for a pension. Under certain conditions, there is an entitlement to a survivor's pension, but goes out when a new marriage.

If no splitting is performed, the person responsible for the family work is at a disadvantage within the breadwinner marriage as regards the financial supply in case of death of the partner. While the survivor's pension is only a part of the pension of the main breadwinner, it gets even if he widowed, continue the entire pension. This asymmetry between the partners is regarded by critics as that in partnership paid work and family work are been declared as equivalent, but they are not factual.

Pension obligation

In 2011 was discussed on the topic of retirement obligation for self-employed. The former Labour Minister Ursula von der Leyen called for a mandatory pension scheme for self-employed. In the coalition agreement between the CDU and the SPD, the pension obligation is not mentioned, although both CDU and SPD uttered for a general retirement obligation before the election. This general duty is not limited to the self. More information is currently not available. For self-employed, however, is already a concept. Even criticism of the project as planned von der Leyen followed promptly.

Key points of the pension obligation are:

• 250 to 300 euros per month for retirement
• 100 euros for the protection of incapacity
• Retirement obligation should apply to all under 30 year olds and start-ups
• Transitional provision in the 30 to 50 year old self

Critique of the concept of retirement obligation:

• No empirical evidence that self-employed are particularly affected by poverty in old age
• Self put in prevention especially on rental / leasing and capital from pension and life insurance
• Age Security Report 2012 shows that 77 percent of retirement planning using the statutory pension insurance
• Approximately 53 per cent relate retirement income from private pensions
• Average reach former self a median income of 1,430 euros (compare workers: 1,250 EUR )
• Industries and associations favor not completely against a pension obligation from. However, any self-employed should decide how and in what form he wants to make provisions.

Gender issues

Women often earn less than men and they have held less frequently well-paid management positions. In addition, some of the women through pregnancy and child rearing - often longer - downtime. This caused the falls pension from the statutory pension insurance for women, on average, significantly lower than for men. Women as housewives often never worked and therefore do not have a right to a pension ( old-age poverty ).

The longer life expectancy of women is reflected in tariff provision contracts down as a longer distribution time is taken into account, which reduces the monthly pension.

On 1 January 2006 for Riester pensions unisex tariffs were introduced. Since then, men have to pay the same amount as women, although they receive the benefits of a statistically shorter period.