Start sorting out your pension now—it’s almost never too early
What can anyone honestly say about pensions that is even the least bit interesting, except perhaps that, like a job, to be without one is to be without a livelihood? That situation is in itself sufficiently dramatic to warrant some attention.
The payments you make into the German Social Security System will depend on whether you are self-employed or work for someone else. Most employees in Germany pay compulsory pension premiums (Pflichtbeiträge). One important exception applies to those earning less than € 325 a month. Even here, however, it may well be advisable to make payments (these small sums add up quickly), which can be done by filling out a special form available from employers (Arbeitgeber). When you begin working in Germany, the pension authorities will issue you an insurance number (Versicherungsnummer or VSNR) and an identity card (Ausweis), which you must give to your employer. Insurance payments are currently 19.1 percent of a monthly salary. Half of this amount is paid by the employer. You will need to have paid Social Security for a minimum of five years in order to receive any retirement benefits. Questions pertaining to such benefits are best answered by the organizations involved: the Bundesversicherungsanstalt für Angestellte (BfA) for white-collar workers (their main office is at Viktualienmarkt 8, Tel. 51 08 10, and their Web site with information in English: www.bfa.de) and the Landesversicherungsanstalt Oberbayern (LVA) for blue-collar workers (Thomas Dehler Strasse 3, Tel. 67 81 0). The self-employed (Freiberufler) are in a more difficult situation. Depending on their line of work freelancers may have to pay the monthly contributions in full out of their own pockets. This category includes teachers, journalists and translators. In some cases the Artist’s Social Security Fund (Künstlersozialkasse) will pay part of the contributions (Tel. 04421-3080). However, there are exceptions, such as consultants and certain types of manual worker. The situation is so complex that any freelancer would be well advised to consult the BfA. Queries can be dealt with on the phone but it is also possible to make an appointment, which is probably the better option. There is no special service in English but if you mention on the phone that you would prefer an English speaker this can usually be arranged. Call the number given above and have your insurance number handy.
If you are only a short-term resident of Munich paying German Social Security may well seem superfluous. But it is not. More and more countries have reached agreements (Abkommen) with Germany that allow pension payments (Rentenbeiträge) to be credited to your Social Security account once you return home. Some nationals, this includes US citizens and Canadians, who have paid into the German Social Security System have the option of reclaiming a portion of their retirement benefits provided they have worked in Germany for less than five years. This option is not open to EU nationals.
Anyone planning to stay in Germany long term can take out an additional, private pension (Private Rentenversicherung). In this case it is best to phone at least three insurance companies (Versicherungsgesellschaften) and ask for offers (Angebote).
If, as Benjamin Disraeli wrote, “old age is regret,” then perhaps it is still better to regret in comfort than in poverty.
