Summarized for you:
Advantages and Disadvantages:
Let's talk straight!
Absolutely, there are clear advantages and things you simply need to know! To assist you in making decisions, here are the facts straight to the point:
The benefits of direct insurance with salary conversion are:
- You receive a lifelong pension with no “ifs and buts”, which is paid in addition to and without being offset against your statutory retirement pension
- In contrast to other forms of state-subsidized pension provision, you can also have the capital you have saved paid out in one lump sum when you retire. A partial capital payment is also possible (30% capital, 70% as a pension benefit)
- The company pension scheme is particularly secure and enjoys special protection by law in the event of insolvency (insolvency of your employer, personal insolvency, receipt of citizen's allowance, receipt of basic social security)
- You save from your gross income: savings contributions are tax-free up to 8% of the contribution assessment ceiling for statutory pension insurance (BBG) and also exempt from social security contributions up to 4% of the BBG. In 2026, this corresponds to 676 or 338 euros per month.
- The tax benefit is taken into account directly in your payslip and does not have to be applied for retrospectively via your annual tax return
- As a rule, your employer makes an attractive contribution of their own as a subsidy to your salary conversion
- Special conditions by taking out a collective policy through your employer
- The contribution amount is very flexible and can also be changed during the year
What you should also know:
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Payouts are only taxed retrospectively at retirement age. As the amount of tax depends largely on the level of income, you benefit from deferred taxation in particular if your taxable income falls when you retire.
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Payouts are generally only possible after you reach the age of 62
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If social security contributions are saved when you pay in, this is sometimes associated with lower benefits. These include the statutory pension, sickness and unemployment benefits and parental allowance. Although the disadvantages are relatively small, they must be taken into account in individual cases. Your personal advisor will be happy to provide you with further information on this.
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If you change employer, you have a legal entitlement to transfer, but the name and tariff of the pension provider may change. However, thanks to a corresponding agreement between the insurers, you will not suffer any disadvantages in this case due to deductions or double acquisition costs.
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Due to statutory provisions, in the event of your death, the standard death benefit may only be paid out to your spouse, registered partner, children entitled to child benefit and, under certain conditions, to your partner. Death benefits to other persons (e.g. parents, siblings) are only possible in the amount of a so-called death benefit up to a maximum of EUR 8,000.
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Benefits from a company pension scheme are subject to the full contribution obligation in the statutory health and long-term care insurance. Within the health insurance for pensioners (KVdR), an annually increasing allowance of currently 197.75 euros per month applies for health and long-term care insurance. If your monthly company pension is higher than the allowance, the long-term care insurance contribution is payable on the full company pension and the health insurance contribution is only payable on the difference to the allowance. The contributions to health and long-term care insurance are fully deductible as special expenses and thus reduce the tax burden.
We would be happy to weigh up the pros and cons of a company pension plan with you. Please make an appointment and we will take time for you.
Nathalie, she is part of the internal services team and an organizational mastermind!
If you change employer, there are various ways in which the company pension scheme can be continued:
Transfer to the new company: If your new employer also uses the same pension provider (insurer), we will take care of transferring your existing contracts and contributions. We check the specific regulations of your new employer and ensure that your occupational pension scheme continues seamlessly.
Transfer to a new contract: If your new employer uses a different pension provider, you have the option of transferring the amounts you have saved to a new occupational pension contract with this provider. This process is called a “actuarial reserve transfer”. You even have a legal right to this from your new employer within 12 months of leaving your previous employer. We will check the details with your new employer and the pension provider so that your pension can be continued without any gaps.
Private continuation: Private continuation with your own contributions is always possible. If you live outside the EU, there may be restrictions.
If the provider of your direct insurance (pension provider) actually had a shortfall and was therefore no longer able to guarantee the full amount of the guaranteed benefits, the statutory supervisory authority (BAFIN) would take over the management of the pension provider and initiate measures. For German life insurers that get into difficulties, there is also the legally regulated protection fund Protektor. If, despite Protektor, a reduction in benefits is necessary - which has never happened before for direct insurance policies with a German insurer - your employer is liable for this. You can therefore be sure that the money will be available when you retire.
If your employer becomes insolvent during your employment and your employment ends as a result, your direct insurance, including your contract assets, will be transferred to you as a private individual. The further procedure is the same as for a “normal” change of employer.
The employer has the right to decide which service providers and which pension schemes it selects for the company pension plan. The legislator sets certain limits to ensure the security of the contributions paid in. These include minimum guarantees and other safety precautions.
As part of the consultation, employees are presented with their options. Once the employer has decided on a selection of products and investment options, employees can choose from these. The choice is made taking into account the legal requirements to ensure that the contributions paid in are invested safely and in accordance with the minimum guarantees.
The selection is made taking into account risk diversification, historical performance, costs, and fund size, as well as our experience that in most cases, employees do not make any adjustments over many years. Even without subsequent fund changes by the employee, participation in the performance of the most important capital markets should be ensured in the long term. The focus here is on the stock markets.
Yes, that is possible. You can choose from a predefined selection of funds and investment strategies. It is possible to switch both for future contributions and with regard to existing contract assets. There are no additional costs for up to 10 fund switches per year.
That depends on your insurance rate. It can be either immediately after the insurance company receives the application or on the first day of the following month. You can find out what applies to your contract in the insurance terms and conditions or simply ask us.
Each insurance company has its own special form for this purpose. We hope that it will soon be possible to switch funds online. For now, please contact us via your employee portal or by email and let us know what you would like to do. We will then get back to you as soon as possible.
The proportion changes over the course of the contract and, due to the guarantees required in occupational pension plans (e.g., 80% of contributions at maturity), will usually range between 50% and 70%. You can find the exact allocation of your savings between funds and the guaranteed component in your annual policy statement.
No, funds will only be changed at your express request.
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