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Pension plans in Munich

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The pension system in Germany is supported by three main pillars:

German State pensions: This is mandatory for all permanent employees in Germany. The system is "pay as you go". This means that the contributions are deducted from your salary each month. It is all handled automatically by your employer. The deduction will be labelled "RV-Beitrag". The "RV" stands for "Rentenversicherung" which literally translates to "retirement insurance".

Company pensions: If you are non-German and your company offers you this pension, be sure to check if you can transfer this pension to another company or place when you move. There have been cases where contributions have been lost as these transfers were not possible.

Private pensions: The government is encouraging this and is offering subsidies and tax breaks to private pensioners. As the name suggests this pension is privately funded by the person himself. Of the three types of pension schemes, a private scheme offers you the most control, flexibility, and if desired, the lowest risk as a foreign worker in Germany.

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Update 2/04/2008


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