Pensions Reform

The Pensions Reform largely regulates the setting up of private pension provisioning. However, the Act also expressly promotes asset accumulation as part of occupational pension provisioning. Essentially, there are four new rules, which are intended to strengthen this: the legal entitlement of the employee to salary sacrifice, the reduction of vesting periods, the introduction of the Pension fund and the eligibility of direct insurance, staff pension schemes and pension funds for state incentives.

From as early as 2002, for example, contributions to staff pension sheme and Pension funds up to 4% of the income threshold are free from income tax. In addition, for all three formats, there is the option for employee contributions of using the state incentives via allowances or deductions as extraordinary expenses either separately or together.