Retirement provision pension fund?
"As part of your statutory entitlement to a company pension scheme, XXX offers you a pension fund in the form of salary conversion through our contractual partner Allianz.
To supplement your statutory pension, you can convert an amount of at least one hundred and sixtieth of the reference amount according to Section 18 Paragraph 1 of the Fourth Social Code (eg, €20.56 in 2021) from your gross salary, up to a maximum of 4% of the annual contribution assessment ceiling for German pension insurance, and pay it into a pension fund. In addition to the advantage that the converted contributions are tax- and social security-free during the savings phase, you also benefit from the special conditions of the group contract that BMK has concluded with Allianz.
Is it still worth it for me? I'm 50, and at 63, I'll have 48 years of work under my belt. I'll get less gross pay, which means fewer pension points.
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In the case of salary conversion, the pension reduction is always lower than the amount saved – especially if the company subsidizes the pension plan and you receive interest.
For example, if you invest €200 a month for a year (which might be €140 net), this would (as things stand today) result in a pension reduction of just €2 per year.
However, it should be noted that the savings amount is subject to tax and contributions to the KV (if it exceeds the allowance) and the PV when paid out.
At 63, you can claim the old-age pension for long-term insured persons , but this is subject to deductions of 14.4% – even if you have already worked for 48 years.
The earliest pension you can claim without deductions would be the old-age pension for those who have been insured for a particularly long time , which you can claim at the age of 65.
In any case, you should – if you haven't already done so – make additional commissions for your old age.
So you still have 13 or 15 years left – that could add up to a nice sum.
If your employer gives at least a 25% subsidy, it's worth it. If he only pays the statutory 15%, then not
To put it simply: Yes, but the loss of pension points should be smaller than what the additional company pension plan will provide later – but this must be calculated individually, because taxes and social security contributions are also saved.
I'm afraid that's not something you can simply say yes or no to. You'd have to know everything about you (personal circumstances), the contract (what does Allianz do with the money and what costs does it pass on to you?), and possibly even look into the future (inflation?).
You've already paid in for 35 years, and another 12 will be added. Your pension will hopefully not be so low then; in the worst-case scenario, you could benefit from the basic pension. But one thing is also clear: you should have more than just your state pension when you start retiring. This could be retirement savings, or, for example, real estate, or assets working for you. If you have nothing to show for it in any of these areas, then it's time to tackle it.
Retirement planning through salary conversion: Put simply, once you reach a certain level of earnings, you can save, say, €400 a month and spend only roughly €200 on it, reducing your net salary. Up until that point, it's a good deal. Later, when your retirement savings are paid out, they'll be subject to taxes and contributions again, but this won't be as significant. The loss of pension points is also less dramatic.
As I said, I'm unsure how much YOU would benefit and how much Allianz would. And if you acquire a pension entitlement in cash, inflation also works against you, which isn't so much the case with the statutory pension.
If in doubt, you can certainly ask Allianz to calculate what a contract will bring you.