Pension and Retirement Benefits in Germany

Details on statutory and supplemental offerings.

Updated on February 1st, 2023

What are the statutory pension benefits? What do they cover?

Being employed in Germany goes along with mandatory contributions to a pension insurance scheme. These contributions are split equally between employees and employers and are capped at a specific monthly amount. Over the years, these contributions build up to provide employees with a basic provision in retirement.

The amount of the pension benefit depends on several elements, such as the number and amount of contributions made, how long the contributions were made for, and the income and social situation of the individual.

What pension benefits do most employers offer?

Due to Germany’s robust state pension benefits, not everyone subscribes to additional pension insurance. However, especially for high earners, it is quite common.

In this case, we recommend providing a pension allowance so that the employee can use this amount to contribute to a private pension fund of their choosing. Velocity Global cannot advise the employee on this topic.

Can an employer make direct contributions to an employee’s private pension?

This is not possible. We can only accommodate this with an allowance.