Private Pension Scheme: Rürup Pension

Voluntary participation

• Persons with taxable income residing in Germany.

General finances

• Fully funded personal pension plans based on personal contribution payments and capital revenues.

Contribution payments

• Persons provide contribution payments and decide upon its amount individually.

State support

• Only certified pension plans are subject to tax reliefs.
• Extra tax reductions (claimed as special expenditure); tax-deductible contribution payments (100% after 2024) capped by maximum amount.

• Pension plan providers manage pension funds and pay benefits directly to person.
• The ‘Federal Central Tax Office’ approves certified pension plans subject to tax reliefs.
• Tax offices decide on tax refunds.

• Minimum age 62 (age 60 for contracts signed before 2012).

Pension payments

• Accumulated capital through contribution payments and investment yields, minus administration costs/fees of pension plan provider.
• Life-long annuity paid monthly; (partial/full) lump sum payments not permitted (exceptions for small monthly benefits below threshold); calculation of annuities on the basis of unisex mortality tables not required; guarantee of nominal value of invested capital not required.
• Special safeguards similar to statutory old age pension scheme (payments are not seizable, transferable, or otherwise disposable).

Taxation and social security contributions on pension payments

• Pension payments are subject to income tax (100% for pensions granted in 2040) according to the general tax rules.
• Pension payments are not subject to social security contributions.