Company pension scheme in labor law

A provident fund is a separate pension fund organized by one or more employers. This pension fund has legal capacity in its own right. The former employer has no claim of its own. Nevertheless, the provident fund is similar to pension funds. Even if there is no actual claim on the part of the company pensioner, the Federal Labor Court is increasingly assuming that a pension commitment made by the employer gives rise to a claim on the part of the pensioner against the provident funds. However, it remains open to the employer to revoke this claim for factual reasons. The provident funds themselves often protect themselves by means of reinsurance.

Once the employer has promised a service, he also has a certain obligation to perform, i.e. he has a certain liability towards the employee.

If an employer becomes insolvent and is no longer able to fulfill its obligation to pay benefits, there are various ways in which further payments to former employees could continue. The first option is for insolvency proceedings to be opened against the employer's assets. Another possibility may be an out-of-court settlement in which the employer agrees with his creditors to avert the insolvency proceedings, provided the institution of the insolvency proceedings agrees. Otherwise, there may be a rejection of the application to open insolvency proceedings for lack of assets. 

Finally, there is the possibility of a complete termination of the business. This is possible within the scope of this Act, provided that an application for commencement of insolvency proceedings has not been filed and insolvency proceedings obviously cannot be considered for lack of assets. A rejection of insolvency proceedings for lack of assets in this sense means nothing else than that the insolvency court rejects the insolvency proceedings due to probable non-performance of the insolvent. In other words, the insolvent's assets are not sufficient to pay the costs of the proceedings.

Nevertheless, employers always benefit from a company pension plan for its employees. As a result, companies can always advertise a point of security to petential new employees. Likewise, existing employees are also more likely to want to stick with their current employer. Thus, in addition to salary and corporate benefits (perks for employees), a company pension is a financially attractive additional benefit. 

When it comes to what employees want in terms of pension provision, the most important points are security, but also flexibility. Thus, the normal employee increasingly wants to adjust his payment to his needs. Likewise, employers can claim the expenses they have under the pension contracts for tax purposes. Thus, in the case of deferred compensation, employers are also exempt from social security contributions.

An answer to the question of whether a company pension scheme for the self-employed exists has been disregarded to date. The reason for this is that such direct insurance for the self-employed simply does not exist in the known form in which it is implemented. For this type of employment, the only remaining option is private pension provision. Here, the "Rürup" pension is generally recommended. This is a type of pension, where the policyholder pays a certain contribution per month, which is tax-free during the savings phase and remains so for the first time. 

The contributions are thus subject to deferred taxation. Therefore, this is largely comparable to the basic coverage of the company pension plan for employees, as this is also tax-free. The more profit a self-employed person generates, the more he or she should also pay into the "Rürup" pension, since in this case the total tax savings will be higher. However, even in the case of private pensions, an expert should always be consulted, who will find a suitable model of provision for everyone in every situation.

A change from permanent employment to freelance work or self-employment is also no problem. For example, a former company insurance policy can normally simply continue to be paid privately. The claims from the contracts do not expire. If it is not possible to continue an insurance policy taken out as an employee, it is still possible to make the insurance non-contributory. 

This is often unproblematic, provided that a certain minimum amount of the supply contract has been reached. In case of doubt, the sum accrued up to that point is then paid out at the time of the agreed payout date. If the contract has been made non-contributory, please note that a payout can and will be significantly lower at the expense of the policyholder. Any resulting pension shortfall can in turn be compensated for by a private pension plan.