The company pension scheme
Posted: Sat Jan 25, 2025 5:52 am
In a company pension scheme, an employer promises its employees old-age, disability or survivors benefits on the occasion of their employment relationships (Section 1 Paragraph 1 of the Act to Improve Company Pension Schemes [BetrAVG], also known as the Company Pension Act). It is also possible for the employee to forego part of their gross salary and pay this as a contribution into a pension plan. This saves the employee income tax and social security contributions, provided that the tax-free maximum amount and the gross salary do not exceed the contribution assessment limit for health insurance and statutory pension insurance. In addition, employees receive a subsidy for salary conversion from the employer. The employer was obliged to do this with the enactment of the Company Pension Strengthening Act of 2018. The subsidy for salary conversion is a flat rate of 15 percent of the salary conversion amount or the amount of the actual savings in social security contributions.
Taxes on the benefits are only due when the benefit recipient receives the benefit. In addition, contributions to health and nursing care insurance must be made by those with statutory health insurance.
Company health insurance
With company health insurance (bKV), the employer takes out an georgia consumer email list insurance contract with a private health insurance company in the name of the employee.
The employer pays the contributions. They can also come from the employee's net salary. The way the employer makes the commitment determines whether the payment is in kind or in cash and how the employee is taxed.
Common characteristics and differences
The two pension options, company pension schemes and company health insurance, have common characteristics and differences. The following is an excerpt:
Common characteristics
building block in employer branding strategies
Support the retention and recruitment of employees
Employment law arrangement, required by contractual agreement
Often within the framework of collective agreements
Employer pays the contributions to the insurance company
Insurance company provides the agreed services
Supplement to statutory protection
Reduction or closing of insurance gaps
differences
design of collective agreements
taxation of insurance benefits
benefit payment
With company health insurance, employees can see the added value sooner. With company pension schemes, this can also be the case, for example, when it comes to coverage against incapacity to work or occupational disability. However, with pensions in retirement, the added value is only apparent much later.
Proof of the occurrence of a benefit event varies in complexity
symbiosis of company pension schemes and company health insurance
Although company pension schemes and company health insurance are different, their common characteristics suggest that the two pension options should be viewed as interlocking pension models. Ultimately, this offers additional benefits to all those involved. Employers can highlight their services through active communication, bind employees to the company and attract potential interested parties to the company. Employees benefit from the promised benefits because pension gaps are reduced or even closed.
Taxes on the benefits are only due when the benefit recipient receives the benefit. In addition, contributions to health and nursing care insurance must be made by those with statutory health insurance.
Company health insurance
With company health insurance (bKV), the employer takes out an georgia consumer email list insurance contract with a private health insurance company in the name of the employee.
The employer pays the contributions. They can also come from the employee's net salary. The way the employer makes the commitment determines whether the payment is in kind or in cash and how the employee is taxed.
Common characteristics and differences
The two pension options, company pension schemes and company health insurance, have common characteristics and differences. The following is an excerpt:
Common characteristics
building block in employer branding strategies
Support the retention and recruitment of employees
Employment law arrangement, required by contractual agreement
Often within the framework of collective agreements
Employer pays the contributions to the insurance company
Insurance company provides the agreed services
Supplement to statutory protection
Reduction or closing of insurance gaps
differences
design of collective agreements
taxation of insurance benefits
benefit payment
With company health insurance, employees can see the added value sooner. With company pension schemes, this can also be the case, for example, when it comes to coverage against incapacity to work or occupational disability. However, with pensions in retirement, the added value is only apparent much later.
Proof of the occurrence of a benefit event varies in complexity
symbiosis of company pension schemes and company health insurance
Although company pension schemes and company health insurance are different, their common characteristics suggest that the two pension options should be viewed as interlocking pension models. Ultimately, this offers additional benefits to all those involved. Employers can highlight their services through active communication, bind employees to the company and attract potential interested parties to the company. Employees benefit from the promised benefits because pension gaps are reduced or even closed.