P as in Pension Insurance

How is the statutory pension organized?

All employees who were born after 1964 reach the standard retirement age at 67. That is when they can apply for a pension from the statutory old age insurance without deductions. The statutory pension is financed on a pay-as-you-go basis, meaning that employees’ contributions are used to finance current pensions.

For contributions made from their salary, employees receive benefits points based on the ratio of their own contribution to the average contribution. After retirement, the benefits points are multiplied by the current point value. The point value is adjusted once a year; the adjustment is based on the development of wages and salaries. 

You can also file a demand at the stautory old age insurance for information and find out about the current status of your expected pension entitlements.

In addition to the statutory compulsory insurance, some employers offer occupational old age benefits as part of the benefits plan. This occupational pension scheme can be financed by the employer or the employee.


Please note: This is a very general overview on german labor law. If you need help in your particular case, please do not hestitate to contact me or book your appointment. I’m happy to help.

Older employee leaving the office for his pension waving goodbye to his colleague