Pension provision in Germany, what you need to know?

Pensions are often the subject of public interest and political debate. There are several peculiarities of the German pension system, which will be presented in this article.

Let's start with retirement age

The retirement age in Germany is not related to gender, but to the year of birth: those born before 1947 are entitled to retire at age 65; from 1947 to 1958 – after 1946, age 65 + 1 month; those born in 1958, age 66; those born between 1958 and 1964, age 66; those 1964 births are 66 years + 1 month. — At age 66: for each year after 1958 + 2 months; at age 67 for those born after 1964.

How are public pensions paid?

In Germany, a portion of income is paid to the Pension Insurance Fund (Rentenversicherung). People with a monthly income of more than 520 euros are obliged to pay social security contributions. If you work in a minimum wage job (mini-job) with a monthly income that cannot exceed €520, you are entitled to be exempt from the obligation to contribute to the Pension Insurance Fund.

In addition, the employer also contributes a certain amount to the pension fund, and the state advances a subsidy from taxes. The pension is then paid based on the amount from this fund.

Those who are not compulsorily insured (e.g., civil servants and the self-employed) may voluntarily participate in pension insurance until they retire.

Can I receive a pension?

To receive a pension in Germany, you must have reached retirement age and have a minimum insurance record.

The minimum age at which you can receive an old-age pension depends on the year in which you were born, as mentioned above. More information on the minimum age for receiving a pension can be found at finanztip.de. In addition, you can only receive a pension if you have contributed to the Pension Insurance Fund for at least five years.

Pension Amount

The amount of your pension depends mainly on your length of service and income. The longer you have paid contributions and the higher your income, the higher your pension will be.

However, for those whose income did not exceed 1,250 euros, there is a “basic pension” that is added to the basic pension. To receive the basic pension, one must have at least 33 years of work experience. Foreigners working in Germany are also eligible for the German pension if they meet the above conditions.

Where and how do I apply for a pension?

Applications for pensions are made at the German Pension Insurance Fund. In order to receive the pension on time, the application must be submitted at least three months prior to the start of the payment.