German employer and public pensions highlighted as many miss benefits

Employers in Germany can add up to 20 % of an employee’s gross salary to a company‑pension scheme (bAV). Because contributions are taken from pre‑tax earnings, no income tax or social‑security charges apply during the accumulation phase, and the fund is taxed only when it is paid out as pension. Financial expert Margarethe Honisch notes that “the only pension product where the employer contributes” is the bAV, and workers who do not enrol “leave money on the table each month.”

For hand‑craftspeople, pension coverage is uneven. About 5.6 million people work in the German trades, but only 326,260 self‑employed individuals are enrolled in the statutory pension system, including 62,755 hand‑craftspeople. The Deutsche Rentenversicherung requires 18 years of mandatory contributions for self‑employed tradespeople, after which they may apply for an exemption – a step the agency advises against because it eliminates all future pension claims.

Former CDU leader Friedrich Merz is set to receive roughly €6,150 per month in parliamentary pension benefits, roughly four times the average German retirement income. The amount is calculated from his two‑decade tenure in the Bundestag and is supplemented by a separate “Chancellor retirement allowance” after four years in office.