Germany’s 2022 pension reform forces 15% employer contributions to bAV plans
From January 1, 2022, a significant change in the Betriebsrentenstärkungsgesetz (BRSG) comes into effect. This update expands the regulation, previously only applicable to new contracts starting in 2019, to include older salary conversion agreements.
Under this new phase, employers are now required to contribute 15% to each betriebliche Altersvorsorge (bAV). This contribution can be made through direct insurance, a pension fund, or a pension fund. The employer's contribution is conditional on saving on social security contributions when employees convert part of their gross salary into bAV contributions.
This change aims to strengthen occupational pension provision, ensuring more employees benefit from bAV. It's important to note that no specific employers have been identified as being affected by this change prior to January 1, 2022.
Starting January 1, 2022, the BRSG's next phase expands to include older salary conversion agreements. Employers must now contribute 15% to each bAV, conditional on social security savings. This change is set to enhance occupational pension provision across Germany.
