Support Funds
Support funds are separate legal entities which provide retirement benefits to employees on behalf of employers. Employees are entitled to benefits from their employer, who is responsible for the support fund.
Support funds are not subject to regulation by the German Insurance Supervisory Authority and can as such dispose of their assets at will. To ensure that benefits continue if an employer becomes insolvent, employers are obliged to contribute to the pension guarantee fund (PSV).
Support funds are financed out of employers contributions and their own investment income or via reinsurance. Support funds that are reinsured take out a group insurance policy with a life policy whose premiums are paid by employers. The advantage of this: the employer’s costs are tax-free and the pension benefits are fully guaranteed through the insurance policy. The reinsurance premiums paid by the employer are tax deductible if the premiums remain unchanged or go up.
With a support fund, employer’s contributions are tax- and social security contribution-free in principle. Employees’ contributions for salary conversion purposes are tax-free without limit, and exempt from social security contributions up to 4 per cent of the social security contribution ceiling for the state pension scheme.
Your benefits at a glance:
- Unlimited tax-free endowment opportunities allow high tax-free payments
- Saves social security contributions
- Balance sheet-neutral
Further information
öBAV
Servicegesellschaft für betriebliche Altersversorgung öffentlicher Versicherer mbH
Hansaallee 179
40549 Düsseldorf
E-Mail: info@oebav.de
Tel: +49 211 4554 - 309
Fax: +49 211 4554 - 177