The German pension system has three pillars: social security (GRV), occupational pension schemes, and individual saving schemes.

Financing Vehicles of Company Pension Schemes

Direktzusage (Direct Pension Commitment)

Company-internal accumulation of book reserves, optionally coupled with reinsurance coverage.

Unterstützungskasse (Support Fund)

This entity is legally separate from the employer. No legal claims to benefits arise, but if the Unterstützungskasse has no or insufficient assets, the employer has to fulfil the benefit promise on a secondary liability.

Direktversicherung (Direct Insurance)

Under a Direktversicherung the employer is the policy holder and pays premiums.


A pensionskasse is a legally separate institution. Pensionskassen as well as insurance companies are subject to surveillance of the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht BaFin).

Pensionsfonds (Pension Fund)

A Pensionsfonds is a legally separate institution. Compared to Pensionskassen, less restrictive investment regulations apply.

Social Security Pensions

The social security pension height is earnings-related, but limited to the SSCC (for 2020: EUR 82,800 p.a. for western Länder and EUR 77,400 p.a. for eastern Länder).
Normal retiring age for old-age pensions is shifting from 65 to 67 years between 01/01/2012 and 2029.