Vesting of Occupational Pensions: How to Secure Your Benefits
14 Jun 2025
9
Minutes
Katrin Straub
CEO at nextsure
Company pension schemes are an important component of your financial future. But what happens to your entitlements if you change employers or the employment relationship ends prematurely? The vested benefits of your company pension scheme secure your accrued entitlements.
The topic in brief and concise terms
The vesting of occupational pensions secures your pension entitlements when changing employers, with usually a three-year commitment and a minimum age of 21 being sufficient since 2018.
With salary conversion, your contributions to the occupational pension scheme become immediately vested, including the employer's contribution.
The amount of the vested pension entitlement is calculated differently depending on the type of commitment, often proportionately or based on the contributions paid.
Quick Facts: Vesting of Company Pension at a Glance
The vesting of your occupational pension means that your entitlements are secure even if you change jobs. Since 1 January 2018: Your entitlement is retained if you are at least 21 years old at the time of leaving and the commitment has been in place for at least three years. In the case of salary conversion, your entitlements are immediately vested. The start date of the entitlement is the date of the commitment by the employer. These regulations significantly protect your accrued retirement benefits.
Understanding the basics: What does vesting mean exactly?
Vested rights in the context of occupational pension schemes (bAV) mean that your acquired entitlements to benefits remain intact even if your employment relationship ends before the occurrence of the pension event. This is particularly relevant if, for example, you change employers. The legal basis for this is primarily Section 1b of the Occupational Pensions Act (BetrAVG). If you meet certain requirements regarding age and duration of the promise, your claims can no longer be taken away. For promises made after 1 January 2018, you must be at least 21 years old at the termination of the employment relationship, and the pension promise must have existed for at least three years. Older promises have partly different deadlines, for example, a promise duration of five years with a minimum age of 25 years for promises between 2009 and 2017. The significance of occupational pension schemes as part of your remuneration is thereby emphasised. Vesting thus secures part of your financial provision in old age, regardless of your further career planning. It is important to know the deadlines that apply to your promise.
Deadlines and Requirements: When will your occupational pension entitlements become non-forfeitable?
The deadlines for the vesting of occupational pensions are clearly defined and depend on the date of the commitment. For commitments from 1 January 2018 onwards, a minimum commitment duration of three years and a minimum age of the employee of 21 years at the time of leaving apply. An example: A commitment was made on 1 July 2022, the employee is 26 years old; the occupational pension becomes vested on 1 July 2025. For commitments granted between 1 January 2009 and 31 December 2017, the minimum age is 25 and the commitment must have lasted five years. Even older commitments, for instance before 2001, had minimum ages of 35 and a commitment duration of ten years. Importantly, if funded by salary conversion, the entitlement is vested immediately. This also applies to the statutory employer contribution of 15 percent. Knowing these deadlines is crucial for transferring your occupational pension when changing jobs or securing it otherwise. The exact conditions can be found in § 1b and § 30f of the German Occupational Pensions Act (BetrAVG).
Here is an overview of the most important deadlines for employer-funded commitments:
Commitment from 01.01.2018: Minimum age 21 years, commitment for at least 3 years.
Commitment 01.01.2009 – 31.12.2017: Minimum age 25 years, commitment for at least 5 years.
Commitment 01.01.2001 – 31.12.2008: Minimum age 30 years, commitment for at least 5 years.
Commitment before 31.12.2000: Often minimum age 35 years and commitment for 10 years or other combinations.
These deadlines secure your entitlements even if you leave the company early. A move to another EU member state also does not affect the vesting.
Special case of salary conversion: Immediate security of your contributions
A particularly advantageous regulation regarding the vested rights of occupational pensions exists in the case of salary conversion. If you contribute parts of your salary to an occupational pension scheme (bAV), these claims are immediately legally vested. This means that from the first contribution, your converted salary is secured, regardless of how long you have been with the company or your age. This regulation is found in § 1b paragraph 5 of the BetrAVG. The reason for this is that it involves your own wages being used for retirement provision. The mandatory employer's supplement of at least 15 per cent for direct insurance, pension funds or pension schemes is also immediately vested in the case of salary conversion. This provides high security for your retirement contributions. Should you change employers and the new one does not continue the direct insurance, your claims from the salary conversion remain intact. In this case, you typically have the right to continue the insurance with your own contributions.
Vesting in terms of amount: How much company pension are you entitled to?
If your entitlement to company pension benefits is vested and you leave the company prematurely, the question arises regarding the amount of your future company pension. The calculation methods are established in § 2 BetrAVG and vary depending on the type of commitment and implementation method. For benefit commitments, the pro-rata method (m/n-method) is often used. Here, the achievable benefit is set in relation to the actual and possible company affiliation up to the fixed retirement age. For example: With a promised pension of €200 and a possible company affiliation of 501 months, with actual 181 months, there is a claim of approximately €72. For contribution-oriented benefit commitments and salary conversions granted from 1 January 2001 onwards, the benefit you are entitled to is the one earned from the contributions allocated until your departure (§ 2 Abs. 5a BetrAVG). This avoids a refinancing risk for the employer, as only the actual contributions count. For a contribution commitment with minimum benefit, the entitlement is calculated from the sum of the promised contributions minus risk costs. In the insurance-based method, often for direct insurance and pension funds, the accrued balance is considered sufficient. Here, the surrender value of the company pension may play a role, where a payout before the pension begins is very limited.
The main calculation bases are:
Pro-rata method (m/n-method): Time-proportionate calculation for benefit commitments.
Earned entitlement: For contribution-oriented commitments and salary conversion (from 2001).
Paid contributions plus profits: For contribution commitments with minimum benefit.
Insurance-based method: Contractual balance is decisive (direct insurance/pension fund).
The precise calculation can be complex and depends on your individual benefit commitment.
Expertise in Depth: Current Rulings and Design Tips on Vesting
Jurisprudence on the vesting of company pension schemes is continually evolving. A decision by the Berlin-Brandenburg Higher Labour Court (Case No. 15 Sa 1443/20) clarified that the right to continue a direct insurance policy with personal contributions under § 1b para. 5 BetrAVG does not automatically create a right to transfer the policyholder status to the employee. The employer typically remains the policyholder. The Federal Labour Court (BAG) has repeatedly addressed aspects of vesting, for instance, in the context of employer contributions or the adjustment of company pensions. Our expert tip: Carefully review your pension commitment for regulations on vesting and the calculation of your entitlement amount. When changing employers, consider which options are available for transfer or continuation. Transferring the pension capital to the new employer is possible under § 4 BetrAVG under certain conditions, but often requires the consent of all three parties (former employer, new employer, employee). In the case of direct insurance, the employer can no longer revoke the beneficiary right once the vesting conditions have been met. In the event of employer insolvency, the Pension Security Association (PSVaG) often steps in to secure vested entitlements. However, this does not apply equally to all implementation methods. Seek advice if in doubt to optimally protect your entitlements.
Recommendations for action: How to optimally secure your company pension
To best secure your occupational pension entitlements, there are a few points you should consider. Carefully keep all documents related to your occupational pension, especially the pension commitment and annual statements. Find out early about the vesting periods applicable to you – these depend on the date of the commitment. If you are planning to change employers, you should seek discussions with your current and potential new employers at least three months in advance to clarify your options for your occupational pension. Determine whether the transfer of capital is possible or if you can continue the contract privately. Our expert tip: Document all agreements in writing. In cases of uncertainty or complex situations, such as international changes or employer insolvency, professional advice is advisable. Remember that with salary conversion, your entitlements are immediately vested, offering you high security. Utilize your employer's and the pension provider's information obligations. This will help you keep a clear overview of your valuable entitlements for retirement.
More useful links
The Federal Agency for Civic Education (bpb) provides comprehensive information on the non-forfeitability of occupational pension entitlements.
Under Laws on the Internet you can find the Occupational Pension Act (BetrAVG) in full text as a PDF document.
The German Pension Insurance explains the non-forfeitability of entitlements in its lexicon.
The German Bundestag provides a document on occupational pensions that offers in-depth insights.
The Hans Böckler Foundation offers a detailed publication on occupational pensions as a PDF.
The aba - Working Group for Occupational Pensions e.V. defines the term non-forfeitability in their glossary.
The Federal Ministry of Labour and Social Affairs (BMAS) provides comprehensive information on occupational pensions.
The Federal Ministry of Finance provides information on the Occupational Pensions Strengthening Act.
FAQ
What are the deadlines for the vesting of my company pension?
For commitments from 01/01/2018 onwards: Your entitlement is vested if you are at least 21 years old upon leaving and the commitment has existed for at least three years. Older commitments may have longer periods (e.g., five years commitment and age 25 for commitments from 2009-2017). In the case of salary conversion, the claims are immediately vested.
What happens to my occupational pension scheme when I change employers?
When changing employers, your vested entitlements remain intact. You can often opt to make the contract paid-up, continue it privately, or, in certain circumstances, transfer it to the new employer (§ 4 BetrAVG). Explore the options early.
Is my occupational pension scheme financed through deferred compensation always non-forfeitable?
Yes, entitlements from salary conversion are immediately legally vested according to § 1b paragraph 5 of the BetrAVG. This applies to your own contributions and the statutory employer subsidy.
How is the amount of my vested company pension calculated?
The calculation depends on the type of promise (§ 2 BetrAVG). For benefit commitments, it is often on a pro-rata basis (m/n proportion method), while for contribution-based commitments and salary conversion (from 2001), it is based on the contributions earned up to the point of leaving.
What protects my occupational pension entitlements in the event of the employer's insolvency?
For many implementation methods (e.g. direct commitments, support funds, partially pension funds and pension schemes), vested entitlements and ongoing benefits are protected by the Pension Guarantee Association (PSVaG). Direct insurance policies with irrevocable beneficiary rights are generally not covered by PSVaG protection, as the claim is made directly against the insurer.
Can my employer simply change or revoke a commitment once given?
A change in the benefit commitment does not interrupt the running of the vesting periods. The revocation of entitlement in a direct insurance policy is no longer possible by the employer once vesting has occurred. Fundamental changes to existing commitments are only permissible under strict conditions.
