Germany has one of the world’s most comprehensive pension systems, ensuring financial security for retirees. If you’re an expat living and working in Germany, understanding how the system works is essential for planning your future and maximizing your benefits.
This guide will explain the different types of pensions, eligibility requirements, contribution rules, and how expats can benefit from or transfer their pension rights.
Overview of the German Pension System
The German pension system (Deutsche Rentenversicherung) is based on a three-pillar model:
1.1 Pillar 1: Statutory Pension (Gesetzliche Rentenversicherung – GRV)
• Mandatory for employees
• Contributions are automatically deducted from salaries
• Benefits depend on years of contribution and earnings
1.2 Pillar 2: Occupational Pension (Betriebliche Altersvorsorge – BAV)
• Employer-sponsored pension plans
• Employees and employers may contribute
• Offers tax benefits and additional retirement income
1.3 Pillar 3: Private Pension (Private Altersvorsorge)
• Voluntary pension savings (e.g., private insurance, investment funds)
• Includes Riester-Rente & Rürup-Rente (government-subsidized pensions)
• Suitable for self-employed expats or high earners
The Statutory Pension System (GRV) for Expats
The Statutory Pension System (GRV) for Expats
2.1 Who Must Contribute?
✔️ Employees in Germany automatically contribute to the statutory pension
✔️ Freelancers & self-employed people are generally exempt, but certain professions (e.g., artists, teachers) must contribute
✔️ EU/EEA nationals & non-EU expats can contribute, but special rules apply for non-EU citizens
2.2 How Much Do You Contribute?
💰 Contribution Rate (2024): 18.6% of gross salary
• Employees pay 9.3%, employers match with 9.3%
• Annual cap on contributions: €90,600 (West Germany), €89,400 (East Germany)
2.3 How Long Do You Need to Contribute?
⏳ Minimum contribution period: 5 years (60 months) to qualify for benefits
2.4 How Much Will You Receive in Retirement?
Your pension is based on “Earnings Points” (Entgeltpunkte) collected over your working years.
• More years worked = higher pension
• Higher salary = higher pension contributions & benefits
📌 Average pension payout (2024):
• West Germany: €1,550 per month (before tax)
• East Germany: €1,520 per month (before tax)
Retirement Age & Pension Eligibility for Expats
3.1 Official Retirement Age in Germany
🔹 Standard retirement age: 67 years (for those born after 1964)
🔹 Early retirement: Possible from 63, but with deductions (0.3% per month)
🔹 Full pension at 45 years of contributions (without deductions)
3.2 Can Expats Receive a German Pension After Leaving Germany?
✔️ Yes! If you contributed for at least 5 years, you are entitled to receive a pension—even if you leave Germany.
✔️ Pension benefits can be transferred internationally depending on your nationality.
Pension Rules for EU/EEA & Non-EU Expats
4.1 EU/EEA Nationals (Including UK Post-Brexit)
✅ Contributions in Germany count toward total EU pension rights
✅ You can combine contributions from multiple EU countries
✅ Your pension will be paid from each country where you worked
💡 Example: If you worked 10 years in Germany and 15 years in France, both countries will pay you a pension when you reach retirement age.
4.2 Non-EU Expats (U.S., Canada, India, etc.)
🔹 Germany has Social Security Agreements with countries like the USA, Canada, India, Australia, China, and others
🔹 These agreements prevent double contributions and allow pension transfers
🔹 If your country has no agreement, you may lose benefits unless you qualify for a pension refund (see next section).
📌 Check here for Germany’s international agreements: Deutsche Rentenversicherung website
Can You Get a Pension Refund? (For Expats Leaving Germany)
If you leave Germany before reaching 5 years of contributions, you might be eligible for a pension refund under these conditions:
✅ Non-EU citizens (without a pension agreement country) can request a refund after 24 months of living outside Germany
✅ EU citizens & those from agreement countries cannot get refunds (since contributions count toward future pensions)
💰 How Much Will You Get Back?
• Only your own contributions (9.3%) are refunded, not your employer’s share
• Processing time: 3-6 months
🔗 Apply for a refund via the Deutsche Rentenversicherung here
Understanding Occupational Pensions (Betriebliche Altersvorsorge – BAV)
In addition to the statutory pension, many German companies offer an occupational pension (BAV) to help employees save more for retirement.
6.1 Types of Occupational Pensions
• Direct Insurance (Direktversicherung) – A life insurance-style pension
• Pension Funds (Pensionsfonds/Pensionskasse) – Invests in markets for higher returns
• Employer Pensions (Direktzusage) – Company-funded retirement plans
6.2 Benefits of BAV for Expats
✔️ Lower taxable income (pension contributions are deducted pre-tax)
✔️ Employer matches contributions in most cases
✔️ Portable within Germany, but may not be transferable internationally
💡 Check with your employer if they offer a BAV and how it works for expats!
Private Pensions (Riester & Rürup Plans)
For additional savings, Germany offers private pension options with government incentives:
7.1 Riester Pension (Riester-Rente)
• Best for employees
• Government subsidies & tax breaks
• Limited portability for expats leaving the EU
7.2 Rürup Pension (Rürup-Rente)
• Best for freelancers & high earners
• Tax-deductible contributions
• Cannot be withdrawn early
Key Takeaways & Next Steps for Expats
✅ If you work in Germany, you’re automatically contributing to the pension system.
✅ You need at least 5 years of contributions to claim a pension later.
✅ EU nationals can combine pension rights across countries.
✅ Non-EU expats may get a pension refund if they leave before 5 years.
✅ Consider occupational & private pensions for extra savings.
What Should You Do Next?
✔️ Check your pension contributions via the Deutsche Rentenversicherung online portal.
✔️ Ask your employer if they offer an occupational pension (BAV).
✔️ If you’re leaving Germany, check if you qualify for a pension refund.