Germany’s New Law Expands Occupational Pensions for Low Earners and SME Workers
German government to strengthen occupational pensions: Who benefits most from retirement provision
A new law aims to encourage more people to take out occupational pensions. There are certain prerequisites for retirement provision.
2025-12-06T11:05:00+00:00
finance, wealth-management, personal-finance, business
The German government has introduced a new law to boost occupational pensions. The measure aims to make workplace retirement plans more appealing, particularly for low-income workers and employees in small and medium-sized businesses.
The law builds on the 2018 Occupational Pensions Strengthening Act, which first introduced tax incentives and the 'social partner model'. Since then, traditional pensions—where only employers contribute—have become rare. Instead, salary conversion, where part of an employee’s gross wage goes into a pension plan, is now more common.
The law focuses on expanding pension access for low earners and SME employees. With clearer eligibility rules and targeted support for high-risk professions, the government aims to secure better retirement outcomes. The changes will take full effect by 2026, with key groups already identified for priority benefits.
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