What information can you request from your employer about the status of your occupational pension provision? Especially when planning your retirement, this information is crucial. This article explains what information you are entitled to.
Getting the information is one thing; evaluating it is another. Without expert advice, you will hardly be able to assess your employer’s information. I advise on occupational pension provision and will be happy to help you. Often, obtaining the information is anything but easy. I can support you with that as well.
1. What is occupational pension provision?
2. The employer’s disclosure obligations in detail
- Is there occupational pension provision at all?
- What level of entitlements am I entitled to?
- Do the entitlements lapse when the employment relationship ends?
- How do the entitlements develop after the employment relationship ends?
- Development of the pension provision with the former employer
- How high is the transfer value?
- How high are the entitlements with the new employer?
3. What if the employer provides incorrect or incomplete information?
4. Who can help?
5. Conclusion
1. What is occupational pension provision?
Occupational pension provision is a type of pension system that the employer operates for its employees. This may also include disability benefits and survivors’ benefits. As a rule, occupational pension provision is “co-regulated” in your employment contract, collective bargaining agreement, or a works agreement – however, it constitutes a separate contractual relationship in its own right.
As a rule, occupational pension provision is established by the employer setting aside additional benefits for your retirement provision in addition to your salary. It is also possible for part of your salary to be converted into an entitlement to pension benefits in old age (Section 1a BetrAVG).
From the employee’s perspective, this type of retirement provision has a number of advantages:
First, it provides you with an additional retirement provision system and reduces your dependence on the statutory pension.
In addition, the pension benefits in retirement are subject to lower taxes and social security contributions than your (potentially higher without bAV) salary during your working life.
2. The employer’s disclosure obligations in detail
You will only get an overview of the status of your occupational pension if your employer informs you. You are also entitled to this. Your rights to information are set out in Section 4a BetrAVG and entitle you to obtain details of the provision from your employer or the pension provider.
It is important that you ask explicitly. The employer will not approach you on their own initiative. However, unlike the previous legal situation, you no longer have to demonstrate a “legitimate interest” in the information. A simple request is therefore sufficient.
Caution: Employers are particularly obstructive if you have not worked for the company for a long time and it has since been sold. Nevertheless, you are entitled to information. I will help you enforce this right.
In principle, the employer’s/pension provider’s response must be in text form and drafted in a way you can understand. In addition, the response must be provided within a reasonable period of time.
You can request the following information:
Is there occupational pension provision at all?
First, you can request general information about occupational pension provision in your company:
First, the employer must inform you whether employer-financed pension provision exists at all in the company.
Second, they must tell you whether you can participate and under what criteria. There may, for example, be waiting periods; not every employee is then allowed to join the occupational pension provision immediately.
What level of entitlements am I entitled to?
You can also request more detailed information about the amount of your pension provision – a particularly important right for planning your retirement or before taking a sabbatical. In particular, you are entitled to information on these aspects:
Status of your entitlements resulting from the contributions already paid.
Forecast of the level of benefits you will be entitled to upon reaching retirement age.
The information must be thorough enough to allow you to review it. If data from you is required for the calculation, you must provide it.
Do the entitlements lapse when the employment relationship ends?
After a certain period with the company, your entitlements can no longer lapse, even if you leave your employer. You will then be entitled to benefits from the occupational pension at retirement age, even if you left the company many years ago. You can ask whether your entitlements are already vested.
This right to information is very important if, for example, a possible job change is on the horizon. Different vesting periods apply depending on how the pension provision is structured (Section 1b BetrAVG). If applicable, the employment contract or collective bargaining agreement may also provide for different periods. The employer must take this into account in their response.
Important: Entitlements from deferred compensation are always vested immediately. After all, you have paid them in yourself from your own salary.
How do the entitlements develop after the employment relationship ends?
After you leave, no one pays into your occupational pension any further; nevertheless, your entitlements generally continue to develop. Many occupational pensions accrue interest of, for example, 1% or more after the employment relationship ends.
Accordingly, you should know exactly how your occupational pension will continue to develop. For the purpose of providing information, the employer may assume that you will resign at the earliest possible date.
Development of the pension provision with the former employer
Forecasts are all well and good. Whether they actually come true is another matter. You can therefore ask, even long after you have left, what the current status of your occupational pension is and how it is likely to develop further.
Survivors can also assert this right in the event of a pension claim.
How high is the transfer value?
If you change jobs, you may be able to transfer your occupational pension to your new employer. This requires the consent of all parties involved (new employer, former employer, you).
The former employer or pension provider must therefore inform you of the value at which your vested entitlements would be transferred to your new employer.
Depending on the structure of your provision, the transfer value refers to different values:
In the case of provision directly through the employer or a support fund (Unterstützungskasse), it is the present value of the pension benefits.
In the case of provision via direct insurance, a pension fund, or a pension scheme (Pensionskasse), it is the accumulated capital.
Whether a transfer makes sense depends on many factors. I would be happy to advise you on this.
How high are the entitlements with the new employer?
After changing jobs, you can also request information from the new employer. This is because it is of interest to you what level of entitlements with your new employer would arise from the transfer value of the “old” occupational pension if you wish to transfer it. You must also be informed whether, after a transfer, you would be entitled to disability or survivors’ benefits.
3. What if the employer provides incorrect or incomplete information?
The employer’s disclosure obligations are so-called ancillary contractual obligations. This means you may be able to claim damages if the employer answers your questions late, incorrectly, or not at all.
The prerequisite is that the employer committed this breach of duty intentionally or negligently, which is generally presumed. Difficulties often arise in calculating the amount of damages, which is very complex.
4. Who can help?
You can request a wide range of different information about your occupational pension provision. This information is only useful to you if you can put it into context. I can help you with that.
On the other hand, employers should handle such requests from (former) employees carefully. If you respond incorrectly or imprecisely, you risk high costs in the form of claims for damages. I can help you avoid this.
5. Conclusion
You have a wide range of rights to information vis-à-vis your employer or pension provider regarding the status of your occupational pension provision.
Pursuant to Section 4a BetrAVG, you can request information about the amount of your occupational pension provision from both your current and former employer.
You also have rights to information vis-à-vis your former and new employer regarding the transfer value of the occupational pension provision if you change jobs.
If the employer does not comply with their obligation accordingly, you can claim damages.
In order to be able to assess the information, expert advice is important.