Company pensions for employers
Every one of your employees has a statutory right to salary conversion — and obligations attach to that for you. Set up properly, it stops being a burden and becomes an instrument that helps you keep and attract staff.
Your obligations — briefly and completely
Right to salary conversion
Under § 1a BetrAVG every employee subject to social insurance may require part of their pay to be converted into a company pension. You cannot refuse — you can only determine the implementation route.
Mandatory employer subsidy
Where salary conversion saves you social security contributions, you must pass on 15 % of the converted amount. Since 2022 this applies to all commitments, including legacy contracts.
Subsidiary liability
You remain liable for delivery of the promised benefit — even if the chosen provider fails to deliver. Provider selection is therefore not a side issue.
Duty to inform
Employees must be told about their entitlement. Failing to do so exposes you to damages claims — a risk routinely underestimated in practice.
What you get out of it
- Lower social contributions. No employer share falls due on the converted amount up to the contribution ceiling.
- Staff retention. A well-built scheme works beyond the annual salary negotiation, especially with skilled staff.
- Recruiting advantage. An employer-funded subsidy above the statutory minimum is visible and often cheaper than an equivalent pay rise.
- Legal certainty. A clean pension scheme rulebook ends case-by-case arguments and makes the workload predictable.
Honestly: there is administrative effort
A company scheme means ongoing administration — change notifications on joining, leaving, parental leave or salary changes. Underestimate it and within two years you have an unmanageable patchwork of individual contracts across several providers.
- Without a single rulebook the effort grows with every contract
- Contracts brought along by new hires add further complexity
- Liability stays with you regardless of who arranged the contracts
That is why I set up the structure first and choose products second — not the other way round.
How we proceed
-
Stocktake
Which commitments already run, which routes are in use, where are liability or information gaps?
-
Pension rulebook
One set of rules for everyone: who gets what, through which route, with which subsidy.
-
Rollout & support
Implementation, employee briefings and ongoing support — including consultation hours for your team so the questions do not land on your desk.
From the employer's perspective
Must I offer a scheme even as a small company?
Yes. The right to salary conversion applies regardless of company size — even with a handful of staff. You do not have to fund the pension, but you must enable it and pay the statutory subsidy.
How high is the mandatory subsidy exactly?
15 % of the converted pay, to the extent you actually save social security contributions. Many companies simply pay a flat 15 % because calculating it precisely costs more administration than it saves.
What happens when employees leave?
Entitlements from salary conversion vest immediately. The contract can be continued privately, frozen, or under certain conditions transferred to the new employer. Your contributions end on departure.
Can I consolidate existing contracts with one provider?
Existing commitments cannot simply be moved — vested entitlements are protected. What is possible is to standardise future commitments and consolidate the legacy book step by step. That is usually the realistic path.
Let's look at your company
In the first call we establish where you stand, which obligations are open and how much effort a clean solution really involves.