Implementation options

To date, occupational pensions have taken four different forms. These “classic” implementation formats are regulated in the 1974 Occupational Pensions Act (BetrAVG). When the Retirement Savings Act (AVmG) came into force it brought with it a fifth attractive alternative, the pension fund.

It is impossible to generalise about which route is best for which company. When deciding which format to choose, companies should take account of the various tax and social security implications. The Pensions Reform has added another factor – that of eligibility for state incentives. Given the changes in the legal parameters as a result of the Retirement Income Act (AEG) in 2005, a review of existing pension arrangements is more relevant than ever..