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Pension Scheme

Contributions to “Rentenversicherung”, the German pension scheme, are part of the statutory social security payments. The scheme protects those insured and their families if their employment capacity is endangered or reduced and when it ends due to age or death.

It covers medical rehabilitation measures, professional rehabilitation, pensions due to diminished employment capacity, old-age pensions, dependents’ pensions. Contributions to the statutory pension scheme are deducted from salaries at source. You do not have to worry about them. As a rule, the employer is responsible for paying half of the contribution towards pensions, the employee the other half. The employer registers his employee with the respective health insurance provider who then automatically forwards the registration to all the other social security providers.

Recognition of pension rights

When examining the prerequisites for entitlement, Member States of the EU or Partners to the Agreement have to recognise periods during which pension rights have been accrued in Germany. Periods during which pension rights have been accrued in countries which do not have a “Sozialversicherungsabkommen” (social security agreement) with Germany may not be added to the German periods in order to fulfill the prerequisites for entitlement. It is definitely worth informing yourself beforehand about the regulations valid in your country. If you have been employed in different countries in the course of your working life and have paid contributions to the respective social security systems you should make enquiries about your entitlements with the social security providers in the individual countries well in advance.

On principle, it is not foreseen that a single pension, comprising all the periods covered, should be paid by any one country. There are just a few exceptions aimed at avoiding mini-pensions.

Your pension scheme contributions will remain valid in every country in which you have been covered and have paid contributions until you have reached pensionable age according to the laws of the respective country. All social security providers award pensions on the basis of their own national legislation. This could mean that you might receive various different pensions.

Pension contribution refunds

If you return to a country which does not have a social security agreement with Germany you can apply for a refund of the pension contributions you have paid in Germany. After a waiting period of two years, you may apply to the “Deutsche Rentenversicherung” (German statutory pension insurance scheme) for a refund. Visit their website for more information on which contributions can be refunded.

Occupational pensions

If you are classified as a public service employee according to your employment contract you will usually be included in the statutory “Versorgungsanstalt des Bundes und der Länder” (Pension Institution of the Federal Republic and the Länder, VBL). VBL provides occupational pensions. The contributions to be paid by employees under the statutory scheme are fixed at a certain percentage. If you are employed at a university on a short-term academic contract you can be exempted from the VBL’s statutory insurance scheme. However, your employer will have to register you for the VBL’s voluntary insurance scheme. In this case, it is only the employer who pays into the scheme, at a reduced premium. You can apply for exemption at the Personnel Department within two months of starting work.