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Membership of the pension scheme is compulsory for all individuals who are not self-employed or who are undergoing vocational training - with the exception of civil servants. Pension insurance provides you with life-long protection against the risks of reduction in earnings capacity, old age and death.
Pension contributions, which are compulsory for all white and blue-collar workers, are paid half by you and half by your employer into the health insurance fund. The amount of the contribution is proportional to your income, but only up to the 'contributions limit'. Therefore, employees earning over EUR 5,200 a month (western Germany) or EUR 4,400 a month (eastern Germany) pay only the maximum rate corresponding to this limit (as at 2006).
Moreover, your pension contributions not only provide for your old age, but also help cushion the effects of unexpected strokes of fate. These additional benefits include invalidity pensions (incapacity for work), survivors' pensions (widows' and orphans' pensions) and medical and occupational rehabilitation.
Text last edited on: 11/2006
Source: European Union
© European Communities, 1995-2007
Reproduction is authorised.
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