Leaving Germany? Don't forget your company pension (bAV)
By Anna Kliem
Many internationals leaving Germany hear about a statutory pension refund, but far fewer realise they may be leaving their company pension behind. The team at Germany Pension Refund, who help former Germany-based employees recover pension contributions, explain how occupational pensions work when you move away.
One country, two pensions
Most employees in Germany automatically pay into the state pension scheme. Payments are typically 18,6 percent of gross salary, split equally between employee and employer, and go to the Deutsche Rentenversicherung (DRV).
In certain circumstances, non-EU citizens living outside the EU and the UK can have their employee contributions refunded 24 months after their last mandatory payment.
However, millions of employees in Germany also have an occupational pension, known as the betriebliche Altersversorgung (bAV). It is either funded by the employer or through salary conversion (Entgeltumwandlung), and usually sits with an insurance company or a pension fund.
These are two separate pension pots with different rules. A German state pension refund does not include the company pension, and the company pension does not pay out automatically when you leave the country.
How to find out if you have a German company pension
Many expats simply do not know whether they have a company pension. To find out, check your old payslip for terms like Direktversicherung, Entgeltumwandlung, Pensionskasse or bAV, and search your inbox for annual pension statements from insurers.
Public sector employees should look for VBL or ZVK, while theatre or orchestra employees should check for VddB or VddKO, as those schemes have their own rules.
If you are unsure, ask your former employer's HR department which scheme you were in and who the pension provider is.
Why the money seems locked
German law is designed to protect pensions for retirement. However, if you funded the bAV from your own salary, then your entitlement is immediate.
Employer-funded entitlements, on the other hand, are protected after at least three years of service, and if you were at least 21 when you left (for contract departures since 2018, older contracts had different threshold periods). German law generally forbids cashing out or surrendering a policy after leaving an employer.
Cancelling the pension policy does not release the money, it merely freezes the contract until retirement. This is why requests asking for pension payouts are usually met with a polite refusal.
Three ways a German company pension can still pay out early
There are three instances when a German company pension can still be paid out if you have left the country.
- Small entitlements: If the accrued pension is small (in 2026, up to 59,33 euros per month, or a lump-sum value up to 7.119 euros), the former employer can choose to settle in cash. This is at the employer's discretion, but because small accounts cost money to manage, requests are often approved.
- The statutory refund route: Under Section 3 of Germany's Company Pension Act, your employer must cash out your vested company pension upon request once your state pension contributions have been refunded. Once you hold your official DRV refund decision, the employer cannot refuse.
- Contractual retirement: If neither condition applies, your pension is paid out when you reach contractual retirement age (typically age 62 or later), regardless of where in the world you live.
The correct order of operations
The refund route only opens after the statutory DRV refund is completed. To use the statutory refund route, the following order is usually best:
- Leave Germany
- Wait out the mandatory 24-month period
- Claim and receive your state pension (DRV) contribution refund
- Submit a written settlement demand to your former employer, attaching your official refund decision (Erstattungsbescheid) as proof
You will receive the cash value accumulated in the contract (or an actuarially calculated present value for internal pension promises).
Taxes and social security contributions
One caveat is tax. German tax may initially be deducted or assessed on a company-pension payout, but that does not necessarily mean Germany keeps it. The Double Taxation Agreement (DTA) with your country of residence determines the final result: if it gives your residence country the exclusive taxing right, German tax can generally be reclaimed. Under other treaties, Germany may retain a taxing right, or the tax is credited abroad.
Additionally, anyone no longer in German statutory health insurance owes no German health or long-term-care contributions on the payout. Professional tax advice on the matter is worthwhile.
Still in the EU or the UK? File this away for later
Citizens or residents of the EU, EEA, Switzerland, and the UK generally cannot use the statutory DRV refund route. However, your pension entitlement never expires and can change if you move.
Keep your payslips, annual statements, policy numbers, and HR contact details safe. If the refund route is unavailable to you now, you can still claim a small entitlement payout or receive standard monthly pension payments once you reach retirement age.
Had a company pension during your years in Germany? Germany Pension Refund explains which schemes can be cashed out, how the settlement demand works, which documents you need and how to check your statutory refund and company pension in one go.
Anna Kliem is co-founder and managing director of Germany Pension Refund (ATLAES GmbH, Berlin). Since 2015, her team has helped thousands of former Germany-based employees from outside the EU reclaim their statutory pension contributions—and, increasingly, unlock forgotten company pensions.Read more