What is it about?
Occupational pensions build retirement benefits through an employer arrangement. Funding, implementation and employee entitlements depend on the chosen structure.
On this page
- How do occupational pensions work?
- Who can use an occupational pension?
- Who pays the contributions?
- Salary conversion: benefits and consequences
- What employer contribution is required?
- Costs, taxes and social contributions in retirement
- What happens when you change employer?
- When is bAV worthwhile and what do we assess?
How do occupational pensions work?
Occupational pensions supplement retirement provision through an employer commitment. Routes include direct insurance, a pension insurance fund, pension fund, direct promise or support fund. Contributions, guarantees and later benefits depend on the structure. A clear arrangement connects company pension rules with employees’ individual needs.
Who can use an occupational pension?
Employees can request conversion of future pay under the statutory requirements. Collective agreements and company rules must be considered; the employer generally determines the offered route. Employer-funded benefits are also possible. Directors and unusual employment arrangements require individual checks of status, entitlement and tax treatment.
Who pays the contributions?
Contributions can be employer-funded, deducted from pay through salary conversion or shared. The actual employer contribution and its conditions matter. Compare today’s net cost with future guaranteed and potential benefits. Company pension rules should explain participation, contributions and changes in employment clearly.
| Contribution model | Who pays? | Important assessment |
|---|---|---|
| Employer-funded | Employer | Commitment and eligibility conditions |
| Salary conversion | Employee from future pay; possible employer contribution | Net cost and effect on social benefits |
| Shared contributions | Employer and employee | Amount and conditions of employer contribution |
Salary conversion: benefits and consequences
Part of gross pay goes into the pension. Within statutory limits, current taxes and social contributions may be reduced. This can also reduce statutory pension accrual and other earnings-related benefits. Assess net cost, employer contributions and later deductions rather than focusing only on today’s savings.
What employer contribution is required?
Salary conversion through direct insurance, a pension insurance fund or pension fund generally requires a 15% employer contribution insofar as the employer saves social contributions. Collective agreements may differ. Employers may contribute more. Check the amount actually required and offered, alongside existing commitments, before deciding.
Costs, taxes and social contributions in retirement
Acquisition and administration costs, investments and guarantees influence benefits. Payments may trigger income tax and, depending on insurance status, health and long-term care contributions. Rules differ by pension route and treatment of contributions. Compare understandable net scenarios and guaranteed values; today’s advantages do not mean deduction-free retirement.
What happens when you change employer?
Depending on the contract and legal requirements, options include transfer, private continuation or paid-up benefits. Taking over the policy on identical terms is not automatic. Employer-funded rights may have specific vesting rules. Check deadlines, existing guarantees and potential new costs before replacing or transferring an arrangement.
When is bAV worthwhile and what do we assess?
A substantial employer contribution can make an occupational pension attractive. Costs, retirement shortfall, long-term affordability and expected job changes remain important. Employers need clear commitments and administration; staff need an understandable overall calculation. We review documents, guarantees and alternatives together before choosing a particular arrangement.
Who is it for?
For employers and employees considering a workplace pension or reviewing existing arrangements.
What we look at together
- Funding and employer contributions
- Costs, benefits and implementation
- Changes of employer and retirement payments
What helps for our first conversation?
- Existing pension documents
- Employment arrangement
- Funding, budget and questions
Your topic is enough for a first message. We agree on a suitable way to exchange personal documents or medical details later.