company pension

Everything about occupational pensions

Occupational pensions are among the offers that many companies offer their employees as pension benefits. Important information on occupational pensions and their implementation channels, such as pension funds, direct insurance, pension funds, provident funds and direct commitments at a glance.

Initial information – Initial information for insurance brokers in accordance with § 11 VersVermV read and download.

The occupational pension at a glance

The fact that the statutory pension insurance only represents a pillar of old-age provision is known to young employees at the latest since the introduction of private pension insurance by Riester. Since then, occupational pension schemes have gained enormous popularity. However, little is known about the fact that permanent employees are entitled to a company pension to have. The different models of occupational pensions can be funded by employers and employees – mixed forms are also common.

Even if employees benefit from their right to a company pension, the golden years of the direct commitment are over: Only a few companies treat themselves and their employees the luxury of financing the company pension completely out of pocket. Today, external pension solutions such as pension funds and provident funds have become established.

The occupational pensions scheme provides the employee with retirement, invalidity and death benefits. This model is a pillar of old-age provision in Germany. The company pension scheme can be provided as a defined benefit plan: The employer guarantees his employee a cash benefit as a pension, in the event of disability or death. The defined contribution benefit On the other hand, it includes fixed payments by the employer on the employee’s insurance. In the case of pension funds, on the other hand, the premium commitment applies with minimum benefit. Here, the employer is liable for the contributions paid. The company pension scheme applies to employees, workers, apprentices and, under special conditions, also to shareholders of a limited liability company.

Models for the occupational pension

Among the most popular ways of implementing the occupational pension belongs the direct commitment. The direct commitment includes benefits paid by the employer for the employee’s retirement, disability and death benefits. In the case of a direct commitment, the benefit is paid directly by the employer to his employee. The employer can decide for himself how to invest his contributions. The direct commitment is protected by the Pension Assurance Association from the consequences of insolvency.

Another occupational pension scheme is the provident fund. Here, the pension is provided by the employer to a provident fund, which operates independently as a company, association or foundation. From the employee side, the contributions are made through the salary conversion. Pension funds are not to be confused with pension funds, which also collects contributions as a pension fund, manages them and distributes them later in the event of care.

The pension fund will be the company pension often paid by the employer and by the employee salary conversion. As part of the Riester promotion these contributions are deductible as a special edition. According to a similar model, direct insurance is also provided as life insurance: Employers conclude a contract with their insurance company for their employees. Pension funds are also becoming increasingly popular as another model of the company pension. The pension fund is comparable to an insurance company and, as an independent institution, settles the retirement benefits and distributes the contributions in the event of a pension. The contributions to the pension fund are again provided by deferred compensation or by a sponsoring company.

Final facts about the occupational pension

Since 2002 all companies have had to offer a company pension based on salary conversion. Employees whose companies do not pursue a standardized occupational pension scheme do not have to forego an occupational pension scheme. In this case, workers should insist on their claim. Many bosses are surprised when they hear from their bank or insurance advisor how they can even save taxes with a company pension plan. Many companies also leave the decision to their employees and offer several pension models. Who changes the company someday, of course, can continue to hold on to his retirement.

The company pension is distributed on reaching retirement age, in the event of disability or death. Whoever uses his services before the agreed date pays discounts. Occupational pensions are taxed at the retirement age, which benefits most employees from tax benefits.

At the present time, only half of German medium-sized companies offer a company pension scheme. In many small and medium-sized enterprises, this gap is stuffed with life insurance, which, on the bottom line, represents the less attractive care model for the employee. However, entrepreneurs can save taxes with attractive insurance models for their employees and benefit from improved employee loyalty to their pension-facing company.

Related Posts

• 

  Pensions on Lake Constance – family atmosphere on vacation at the lake

  Guesthouses at Lake Constance Family atmosphere on holiday at the lake The holiday in a pension on Lake Constance offers a great and at the same time…

• 

  Occupational disability insurance comparison: test and tips 2019

  Occupational Disability Insurance Comparison: Find the right fare Quick Navigation: Disability insurance test to close the pension gap The occupational…

• 

  Mba extra occupational studies

  MBA study extra-occupational – The overview An estimated 90% of MBA programs are offered on a part-time basis, sometimes as an “Executive MBA”, sometimes…

• 

  Self-employment: criteria for self-employed

  bogus self-employment Beware of self-employment Since more and more young entrepreneurs push for the market, in Germany the problem of bogus…