The German pension system is under pressure: More and more retirees are burdening the coffers. That is why experts are discussing reforms. One suggestion: In the future, top earners should forego part of their high pension. But how high is the maximum pension? And how does this compare to civil servants’ pensions?
In short, the German pension system works like this: With their income, employees acquire so-called remuneration points (also called pension points, or RP). The more such points you have when you retire, the higher your retirement benefits will be.
Currently, one RP brings a monthly pension of 36.02 euros in the West. In the new federal states, the value is 35.52 euros.
Whoever receives exactly the so-called average salary of all those subject to pension insurance in Germany over the course of a year receives a full pension point. In 2023, that will be (probably) 43,142 euros in the west.
So if you earn 43,142 euros in 2023, you will earn a full pension point equivalent to a monthly pension of 36.02 euros. Whoever has higher earnings acquires correspondingly higher pension entitlements.
Sample calculation: Mr. A. earns 64,713 euros in 2023. That is exactly 1.5 times the average wage. With this, he acquires monthly entitlements of 54.03 euros for his future pension. The formula for this: €36.02 monthly pension x 1.5 = €54.03.
A note: as of July 1, the value of an RP in the West is expected to increase by 3.5 percent. If this happens, one RP brings 37.28 euros per month.
However, pension entitlements cannot be accumulated in unlimited amounts. There is a cap – the contribution assessment limit (BBG) in the pension insurance. That means: Only up to this amount do pension insurance contributions accrue and increase the future pension. In 2023, this BBG will be EUR 7,300 per month, i.e. EUR 87,600 per year. Specifically: high earners have to pay pension contributions for a maximum of 87,600 euros and thus acquire corresponding pension entitlements for retirement. With 87,600 euros they received exactly 2.0305 RP in 2023, equivalent to 73.14 euros later monthly pension. The maximum number of RP that can be acquired changes annually, at times the maximum value per year was below 2.0.
Anyone wishing to draw an old-age pension must have at least 35 years of contributions to the pension insurance (so-called long-term insured). However, certain deductions then apply.
On the other hand, anyone who has 45 years of insurance can use an old-age pension without deductions at the age of 64 years and one month in 2023 if he or she was born in 1959.
The 45 insurance years mentioned are important if you want to determine the maximum possible amount of the pension.
According to calculations by the Deutsche Rentenversicherung DRV, the maximum possible old-age pension with 45 insurance years is EUR 3141.82 gross per month. Dividing this amount by 36.02 euros equals 87.2243 RP. After deducting health insurance contributions, the maximum monthly amount is EUR 2,791.51. Taxes are still deducted from this.
The calculation for civil servants is completely different. Civil servants do not receive a pension in old age, but a pension. This is calculated according to completely different criteria. The reason for this is that the state has a special duty of care towards its civil servants as employer. This has an impact on the level of pension provision.
According to the Federal Statistical Office, on January 1, 2022 there were around 1.38 million pensioners under the civil service and military pension law. The retirees received an average pension of 3170 euros gross per month.
Without going into the differences between the statutory pension and the pension law, it can be said that the average pension in 2022 was EUR 3170, higher than the maximum statutory pension of EUR 3141.82.
But there is more to officials than that.
The competent Federal Ministry of the Interior (BMI) writes about the regulations for civil servant pensions: “The pension of civil servants is calculated from the pensionable service time and the pensionable service remuneration.” The maximum pension rate is 71.75 percent. These can be achieved full-time after at least 40 years of service.
The 71.75 percent is the maximum rate for pension benefits. The same applies here: the actually achieved value is lower.
As of January 1, 2022, the average retirement rate for federal employees was 68.0 percent. If you calculate with this percentage and the average pension of 3170 euros, then the pensionable salaries of civil servants amount to 4661.76 euros per month on average. Those who receive higher salaries – such as federal judges or civil servants – can of course expect significantly higher pensions.
Sample calculation: Anyone who has 8,000 euros a month in official salaries eligible for a pension will get a monthly pension of 5,440 euros with a pension rate of 68 percent. However gross.
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The FOCUS Online Guide answers all important questions about pensions on 135 pages. Plus 65 pages of forms.