Civil Servants’ Old Age Pension Scheme

• Civil servants and judges; soldiers of the Federal Armed Forces; certain holders of public offices.¹

• Fully tax-financed out of the federal budget.
• Since 1999, the federal state has been building up a pension reserve used for expenses after 2031 (for 15 years); financed through reductions in salaries and pension expenditures from previous/current years; managed by Federal Ministry of the Interior, for Construction and Home Affairs.
• Shift towards (partial) capital funding for new entries as of 2007 (creation of special pension reserve fund for new entrants).

• The ‘Service Centre of the General Directorate of Customs’ administers the scheme for federal civil servants and judges (incl. verification of pension rights/entitlements, calculation of pension benefits and payment thereof); specific authorities administer schemes for distinct service groups.

Qualifying conditions for federal civil servants

• Standard public service pension: statutory retirement age increases to 67 for persons born after 1963; minimum service period: 5 years.
• Special retirement conditions apply in case of long-term service (period: 45 years; age: 65), and in case of retirement due to incapacity for service (period: 40 years; age 63); reduced standard retirement ages apply for exceptionally arduous occupations, such as persons working with the federal police, fire departments, soldiers, air traffic control service.

Early retirement

• Available at age 63 with negative (permanent) adjustments to pension benefits (3.6% per year).

Deferred retirement

• Retirement can be deferred up to 3 years upon request (if in the interest of the public employer) with supplements to income (and without positive adjustments to pension benefits).

Combining employment & retirement

• Termination of employment is not a precondition for claiming pension benefits.
• After reaching standard retirement age, employment in private sector is permitted without earnings limit; income ceilings apply for public sector employment and before reaching standard statutory retirement age.

Pension benefits

• Primarily based on last earnings prior to retirement and years of service.
• Maximum pension benefits: 71.75% of reference salary; minimum pension benefits at least 35% of the reference salary or 65% of a defined salary level.

Benefit calculation

• Based on reference salary: typically, the salary prior to retirement (if received for at least 2 years), modified by a reduction factor.
• Based on pensionable periods of service, primarily times of civil and public service.
• Amount of pension benefits determined applying a linear rate of increase (1.79375 percentage points) for each year of service; supplements to pension benefits are granted.
• Adjustments: yearly adjustments of benefits directly linked to adjustments of salaries for active civil servants.

Taxation and social security contributions

• Pension benefits are subject to income tax.
• Private social security premiums (health/long-term care) paid by pensioner with important state subsidies for health care in the form of Beihilfe (‘state aid’).