ARTICLE · 15 AUGUST 2019

Workplace Pensions In Germany: What You Need To Know

Hogan Lovells

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In Germany, paying contributions to the statutory (state) social security pension is compulsory for most employees and their employers

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KEY POINTS

In Germany, paying contributions to the statutory (state) social security pension is compulsory for most employees and their employers.
In addition many companies, in particular large and international enterprises, choose to offer employer-financed (second tier) workplace pension schemes to help attract and retain staff.

Workplace pension arrangements may be set up using one of five different pension vehicles. Details of each type of vehicle are set out in this note.

Since 2002, employers must enable their staff to make employee contributions to a workplace pension scheme through salary sacrifice (Entgeltumwandlung), at the employee's request. Salary sacrifice to a workplace pension arrangement has tax advantages for the employee.

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