According to the German Association for Occupational Pensions (aba), the legislative procedure for an “Act to Reinforce Company Pensions” will be expanded, making a conclusion in this legislative period seem “very ambitious”. The background is that a “Pension Dialog” will be implemented, involving employers associations, trade unions, social associations, consumer advisors, pension insurance, the insurance industry, scientists and the aba. As a contribution to the legislative process, issues of the further development of pension schemes shall be discussed until the closing session on October 20. There will also be “target group dialogs” with the participation of the social partners in the different economic sectors, the aba, the BMAS (Federal Ministry of Labor and Social Affairs), and the BMF (Federal Ministry of Finance) to discuss the implementation of the “social partner occupational pension model” and the “optimization of promotion.”
While the implementation of the social partner occupational pension model is still completely open, the key features for the optimization of the promotion have been more and more condensed to the following:
- In amendment of § 3 (63) EStG (German Income Tax Act), in addition to the tax-free and social security-free 4 % of the annual contribution base in the statutory pension insurance (BBG), no longer just another 1,800 € per calendar year shall be contributable tax-free but liable to social insurance. Instead, it shall be 2,5 % of the BBG (2016: 1,860 €), probably also subject to mandatory social security contributions.
- A time-limited (3 to 5 years) subsequent payment of contributions according to § 3 (63) EStG shall be made possible.
- For low-income earners, a specific allowance model for employer-funded company pension schemes is intended, where the employer gets reimbursed a portion of its expenses via the income tax procedure.
The questions concerning the legal treatment of company pensions under contribution law and the question of allowances in basic security remain open.