Germany's Pension Transfer Process: A Guide

Germany's pension system is widely known for its stability and reliability, but for international residents moving to or from Germany, figuring out how pension transfers work can be a difficult process.

Understanding how to transfer or port your pension when necessary is key for long-term financial security. In this article, we will guide you through the process of transferring pensions when changing jobs or moving to and from Germany, as well as the portability of pensions across different countries.

Understanding Germany's Pension System

Germany's pension system has three pillars: the state pension (gesetzliche Rentenversicherung), occupational or company pensions (Betriebsrente), and private pension schemes. The state pension is mandatory for most employees and funded through social security contributions. Occupational pensions are offered by employers, and private pensions are voluntary retirement savings plans.

International residents working in Germany contribute to the same pension fund, which entitles them to a portion of retirement benefits once they reach retirement age, assuming they've contributed for at least five years. For this reason, it’s important to understand the differences between the German system and your home country's pension policies, particularly how they affect your ability to transfer and retain benefits.

In the following chart, you'll find a clear overview of Germany's three pension pillars and their transferability:

Pillar	German Name	Transferability
State pension	Gesetzliche Rentenversicherung	Portable via agreements
Company pension	Betriebliche Altersvorsorge (bAV)	Depends on scheme
Private pension	Private Altersvorsorge	Generally portable worldwide

Pension Transfers When Changing Jobs in Germany

State Pension

When you change jobs in Germany, your contributions to the state pension system are not lost. They remain in your pension account, and your new employer will continue to contribute on your behalf. You do not need to take any action to transfer these contributions, as they are automatically linked to your social security number.

If your previous employer offered an occupational pension, transferring these funds depends on the specific plan. Some occupational pensions allow for transfer to a new employer’s scheme, while others may require you to leave the funds with your previous employer or transfer them to a private pension scheme.

Company Pension (bAV)

What happens to your company pension depends on the specific scheme you have:

Situation	Options
Same scheme type at new employer	Often transferable
Different scheme type	May need to leave with previous employer
No bAV at new employer	Keep existing policy (frozen or continue privately)

Since 2018, employees have had better protection, making it easier to take their company pension benefits with them when they change jobs.

Transferring Pensions When Moving to Germany

From EU/EEA Countries

For internationals moving to Germany from another EU country, pensions are portable thanks to EU regulations. This means that your pension contributions from other EU countries can be combined with your German pension contributions when calculating your total pension benefits at retirement. Here's what it implies:
Contribution periods are added together to help you meet eligibility thresholds.
Each country pays a proportional pension based on the contributions you made there.
You can apply for all your EU pensions through a single country, simplifying the process.
From Countries with Bilateral Agreements
Germany has social security agreements with many countries, including:

United States
United Kingdom
Canada
Australia
Japan
South Korea

These agreements allow:

Combining contribution periods.
Avoiding double contributions.
Receiving pensions in either country.

From Countries Without Agreements

If you are moving from a non-EU country that does not have a pension agreement with Germany, your pension contributions may not be transferable. In such cases, you may need to maintain separate pension accounts in each country or consider other financial planning options.

Unsure about your pension options? Get expert guidance.

Transferring Pensions When Leaving Germany

Receiving Your German Pension Abroad

If you've contributed for at least five years, you're entitled to receive your German pension anywhere in the world, although this depends on where you relocate and whether an agreement exists. For EU countries, the process is usually straightforward, and your German contributions will be fully recognized.

Even if you retire outside Germany, you can still claim your German pension: it will be paid directly into your bank account wherever you live. Keep in mind, however, that tax rules may vary depending on your country of residence:

Payments can be made to foreign bank accounts.
You can contact Deutsche Rentenversicherung to set up international payments.
Consider currency and tax implications.

Tax Considerations

Germany has specific tax rules regarding pensions, which apply both during contribution periods and when receiving pension payments. Pension contributions are typically tax-deductible, but pension payments are subject to income tax upon retirement.

When transferring pensions between countries, tax implications vary depending on whether the countries have a double taxation agreement (DTA). DTAs prevent you from being taxed twice on the same pension income.

Topic	Details
German taxation	German pensions are partially taxable in Germany
Foreign taxation	May also be taxed in country of residence
Double taxation	Treaties exist to prevent being taxed twice

We highly recommend consulting a tax advisor to understand the tax implications of transferring your pension to or from Germany.

Transferring to Non-EU Countries

With a Bilateral Agreement

f you're moving from Germany to a non-EU country, your ability to transfer your pension will depend largely on whether there is a bilateral social security agreement between Germany and your destination country. These agreements help avoid the loss of pension rights and often prevent double taxation on pension benefits.

If Germany has an agreement with your destination country:

Contribution periods may count in both systems.
Pensions are typically payable in either country.
Application processes are coordinated.

Check out the Deutsche Rentenversicherung website for the full list of agreement countries.

Without a Bilateral Agreement

If there are no agreements between Germany and your new country of residence, options are more limited:

Option	Details
Keep German pension	You can leave your contributions in Germany and receive your pension payments when you reach retirement age.
Request refund	Non-EU nationals may request a refund after 24 months (but note that this only applies to the employee portion of your pension)

Occupational and Private Pension Transfers

Company Pension (bAV)

If you have a company pension plan (bAV), the process for transferring these funds can vary. In some cases, you can transfer your pension to your new employer's plan, while in others, you may need to leave the funds with the previous employer and open a new plan with your current employer.

Direktversicherung: Often transferable.
Pensionskasse/Pensionsfonds: May allow transfers.
Unterstützungskasse/Direktzusage: Typically stays with your employer.

Private Pensions

Private pension plans (non-Riester and non-Rürup) are generally fully portable:

Continue contributions from abroad. Depending on your provider, you may be able to keep contributing even after moving.
Your pension can be paid to you in any country.
Unlike some public or Riester/Rürup plans, there’s nothing you need to pay back.

Lump Sum Refunds

In some cases, internationals may be eligible to claim a lump sum payment of their pension contributions if they leave Germany and do not plan to return. However, this is subject to strict rules and is generally only available for non-EU nationals from countries that do not have a pension agreement with Germany.

Requirements

Left Germany permanently
No return planned
No bilateral pension agreement with your country
Waited at least 24 months since departure

What You Get Back

Employee contributions: You'll receive the portion you personally contributed (around 9.3%).
Employer contributions: These stay in the system and are not refunded.
Taxes: Refunds may be subject to German taxation.

Avoiding Pension Gaps

Pension gaps occur when you are not contributing to a pension system, either because of unemployment, gaps between jobs, or moving between countries. These gaps can reduce the total amount of pension you receive at retirement.

To avoid pension gaps, make sure you follow the following:

1. Continue contributing during transitions (voluntary contributions may be possible).
2. Keep records of all your pension contributions in every country.
3. Check agreements to make sure your periods of work abroad are recognized.
4. Review your pension statement regularly.

Step-by-Step: Transferring Your Pension

Transferring your pension requires careful planning. Here's a step-by-step guide to make the process easier:

1. Contact your current and previous employers. Understand your company pension (bAV) options and the possibility of transferring funds.
2. Gather all necessary documents. Include pension statements, employment contracts, and identification.
3. Reach out to Deutsche Rentenversicherung. For questions about your state pension and eligibility.
4. Check for bilateral agreements. Confirm whether Germany has agreements with your destination country that affect pension portability.
5. Consult a pension or tax advisor (especially important for complex international situations to understand tax implications).
6. Submit required forms and keep copies. Send all forms to the relevant pension authorities and keep records of all correspondence for future reference.

Getting Expert Help

Transferring your pension across borders can feel complicated, with different systems, laws, and tax rules to navigate. Working with an advisor who understands international pensions can make all the difference can help you:

Maximise your tax efficiency

Make sure you don't lose any entitlements

Handle all the paperwork and bureaucracy

At Stay, we help international residents through pension transitions with confidence and ease. Whether you're moving to Germany, leaving, or relocating within the country, we're here to make sure your pension is taken care of.