Take your company pension with you: How to secure your additional pension when changing jobs
10 Apr 2025
6
Minutes
Katrin Straub
CEO at nextsure
A job change often raises questions about occupational pension schemes (bAV). Many employees are unsure whether they can take their occupational pension scheme with them and what steps are necessary. This article provides a well-informed and practical explanation of how to successfully transfer your bAV.
The topic in brief and concise terms
When changing employers, you can usually take your occupational pension scheme (bAV) with you; claims from deferred compensation are immediately vested.
There are various options: continuation of the old contract, transfer of capital, or premium exemption/private continuation.
Pay attention to deadlines (usually one year for the application), potential costs, and the tax aspects of the transfer.
Understanding the Basics: The Options for Taking Your Occupational Pension Scheme
When you change employers, the question arises: What happens to my occupational pension scheme? The good news is that your saved contributions are generally not lost. You have various options for taking your occupational pension scheme with you. The specific options depend on the method of implementation of your occupational pension and the timing of the contract conclusion. For contracts concluded after 2004, there is often a legal entitlement to transfer, particularly for direct insurance, pension funds or pension schemes. The transfer usually has to be applied for within one year after the job change. It is important to clarify the details early in order to avoid financial disadvantages.
The so-called portability, i.e., the ability to take the occupational pension scheme with you, is regulated in the Pension Act (BetrAVG), particularly in paragraph four. This law creates the foundation to ensure that employees do not lose their acquired entitlements. Many employees do not know that they can have a legal entitlement to take with them their pension from direct insurance, pension funds or pension schemes. The vesting of your entitlements plays a central role here; more on this in the next section.
Check vesting: Your secured occupational pension commitments
A key term in the context of transferring your company pension is vesting. Vesting means that your rights to the promised company pension are retained even when you change employers. For entitlements from salary conversion, i.e., contributions you have paid from your gross salary, immediate vesting applies. This means these rights are secure from the first day. The statutory employer contribution is also immediately vested.
For purely employer-financed commitments, certain deadlines apply. According to the current regulation (since 1 January 2018), an employer-financed occupational pension is vested if the employee is at least 21 years old at the time of departure and the commitment has been in place for at least three years. Older commitments may have different, longer deadlines. Therefore, carefully check since when your commitment has been in place and what form of financing exists to correctly assess your vesting. Knowing your vested rights is the basis for taking further steps in carrying your company pension.
Practical Guide: How to Successfully Manage Your Company Pension Scheme
Once you have clarified your vested entitlements, it's time to practically implement the transfer of your occupational pension scheme. There are essentially three ways to carry over your occupational pension. The first option is for the new employer to adopt and continue your existing contract unchanged. This is the simplest variant, but it requires the consent of the new employer, as they are not obligated to do so.
The second option is to transfer the pension capital (funding capital transfer) to the new employer's pension provider. Your accrued capital is transferred into a new contract with the new employer's provider. It should be noted that the transfer value must not exceed the contribution assessment ceiling of the statutory pension insurance (in 2023, West 87,600 euros). The third possibility is to freeze the old contract and continue it privately or let it rest. This can be sensible if a transfer is not possible or disadvantageous. Our expert tip: Clarify with your new employer early on which option they offer and compare the terms carefully. Be aware that transfer fees may apply.
The following steps are typically to be considered for the transfer:
Inform your old employer about the change and inquire about the current status of your occupational pension scheme (transfer value).
Discuss with your new employer the possibility of continuation or transfer of your occupational pension scheme, ideally before signing the contract.
Submit the transfer application in a timely manner (usually within twelve months after changing jobs).
Carefully examine the contract documents of the new provider, particularly regarding costs and guaranteed interest rate.
Seek advice from an independent party if necessary to make the best decision for you.
The transfer of occupational pension with a job change therefore requires some initiative but secures your valuable pension rights.
Costs and taxes in focus: Financial aspects of transferring occupational pension schemes
Taking your occupational pension provision with you can be associated with costs. For example, in the case of a coverage capital transfer, further initial and distribution costs may arise, which can reduce your returns. Although some providers have agreed on cost-neutral transfers within the framework of transfer agreements, this is not always the case. Therefore, explicitly ask about all fees that may be incurred before you agree to a transfer. It is important that the transfer value does not exceed the contribution assessment ceiling to avoid tax disadvantages (currently around €90,600 in the year 2024).
From a tax perspective, the accumulation phase of the occupational pension scheme is usually favourable, as contributions are made from gross salary, saving taxes and social security contributions. The benefits are then taxed upon payout in retirement. If you take your occupational pension provision with you, this principle is usually maintained. Termination and payout of the capital during the accumulation phase is often disadvantageous, as the saved taxes and social security contributions must then be recouped, and often high fees are incurred. Therefore, careful consideration of the financial consequences is essential.
Expert Advice: Avoid Pitfalls and Find Optimal Solutions
Even though the legislator intends to facilitate the transfer of occupational pensions, there are some practical hurdles. Not every new employer is willing to take on an existing contract, especially if it comes from a different provider or has different terms. Another common issue is the lack of knowledge about legal regulations or missing alternative concepts at the new employer. Our expert tip: Insist on your right to transfer the existing capital value when the prerequisites are met, to ensure a seamless continuation and avoid costs from new contracts.
What to do if the new employer refuses to take over the old contract or if their own occupational pension system is less favourable? In such cases, it may be an option to continue the old contract privately (if the implementation method allows) or make it non-contributory. In a private continuation, you pay the contributions from your net salary, which means the tax and social security benefits of the saving phase are lost. A non-contributory status at least secures the claims and interest accrued so far. Carefully weigh the pros and cons. Sometimes, considering whether to cancel the occupational pension is an option, albeit usually associated with significant disadvantages.
Here are some tips for shaping your decisions:
Document your occupational pension commitment and previous contributions precisely.
Engage in discussions with the new employer at least three months before the change.
Compare the terms of the old and potentially new contract (guarantee interest, costs, investment opportunities).
Ensure compliance with the annual deadline for the transfer application.
Consider independent advice for complex situations or high contract values.
A well-planned transfer of your occupational pension secures important elements for your financial future.
Secure your additional pension: nextsure supports you
Occupational pension schemes are an important component for your financial security in retirement. The ability to take your occupational pension with you ensures that your accrued entitlements are retained even when changing employers. While this requires some initiative and careful examination, the effort is worthwhile to optimise your additional pension. Remember that a meaningful occupational pension scheme should be planned in the long term.
At nextsure, we understand that the details of transferring occupational pensions can be complex. As your partner for digital insurance solutions, we help you gain clarity and make the right decisions for your retirement provision. Use our expertise to optimally structure your occupational pension scheme.
Request an individual risk analysis now: Have your insurance situation reviewed free of charge and receive concrete suggestions for optimisation.
More useful links
Bundesministerium für Arbeit und Soziales (BMAS) offers comprehensive information on occupational pension schemes.
Ihre Vorsorge provides detailed information about occupational pensions in the context of a job change.
Deutscher Bundestag provides a PDF document with relevant information on occupational pensions.
Deutsche Rentenversicherung offers a brochure on occupational pension schemes.
Gesamtverband der Deutschen Versicherungswirtschaft (GDV) explains how occupational pensions can be continued after changing employers.
Arbeitsgemeinschaft für betriebliche Altersversorgung (aba-online) offers a definition of the term "transfer" in the context of occupational pensions.
Verbraucherzentrale provides a guide to occupational pension schemes.
Gesetze im Internet (Bundesministerium der Justiz) provides the full text of paragraph 4 of the Company Pensions Act.
FAQ
What legal basis governs the transfer of occupational pension schemes?
The portability of occupational pensions is primarily regulated in Paragraph 4 of the Occupational Pensions Act (BetrAVG).
What does vesting mean in occupational pension schemes?
Vesting means that your claims to the company pension remain intact even if you leave the company before reaching retirement age. Contributions from salary conversion are immediately vested.
Does my new employer have to take over my old occupational pension contract?
No, the new employer is not obliged to take over your old contract unchanged. However, they must offer you a form of occupational pension provision and can transfer the capital into their system if the prerequisites are met.
What is a transfer of reserve capital?
During a coverage capital transfer, the accumulated capital of your occupational pension contract is transferred to a new contract with the provider of your new employer.
Can I continue my company pension scheme privately?
Yes, depending on the implementation method, you can continue your occupational pension scheme contract privately with your own contributions from your net salary or place it on a premium-free hold if a transfer is not desired or possible.
What deadlines apply to the vesting of employer-funded occupational pension scheme shares?
Since 1 January 2018, employer-financed occupational pensions are non-forfeitable if the employee is at least 21 years old at the time of departure and the promise has been in place for at least three years.
