Company pension

In Germany, there are primarily two types of investment fund-based pension schemes you can pay from your gross salary:

1. Direktversicherung (Direct Insurance):
   • Employers offer Direktversicherung as a company pension scheme.
   • Employees make contributions, which are often deducted from their salary, and employers may also contribute.
   • Contributions are invested in insurance or investment funds.
   • At retirement, individuals have options for receiving the pension, such as a lifelong annuity or a lump-sum payment.
2. Unterstützungskasse (Support Fund):
   • Unterstützungskasse is a form of occupational pension provision.
   • Employers establish a support fund for employees.
   • Contributions are made by both the employer and the employee.
   • Funds are typically invested in insurance or investment vehicles.
   • Pensions are paid out to employees upon retirement.

These investment fund-based pension schemes, excluding Riester Rente, are typically offered by employers as part of their company pension programs. They provide a way for employees to save for retirement through contributions made by both the employee and the employer, with the funds typically invested in insurance or investment products. At retirement, employees have options for how they receive their pensions, which can include annuities or lump-sum payments.

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