14.05.2019 | KPMG Law Insights

Company pension scheme – What you need to know… … about the new mandatory employer subsidy for deferred compensation (Section 1a (1a) BetrAVG)

You need to know…
… on the new mandatory employer subsidy for deferred compensation (Section 1a (1a) BetrAVG)

by Christine Hansen and Jean-Baptiste Abel

In our Client Alert , we have already informed you about the current, and in some cases still controversial, course of the new subsidy for deferred compensation. Do you already know the most important things about the grant? Here we summarize in 5 points for you:

  • From when does the subsidy apply? For new deferred compensation agreements since January 1, 2019, the subsidy applies immediately; for older agreements, it does not apply until 2022. In our view, the point of reference is the time of the specific agreement with the employee, not the act of establishment under collective law (collective agreement, works agreement).
  • In what amount is subsidy to be paid? The amount of the employer’s allowance is based on two variable parameters: (1) it comprises 15% of the converted remuneration, (2) if and to the extent that the employer actually saves social security contributions (“SI contributions”). Thus, the amount of the subsidy depends on the actual amount of the conversion itself. Another decisive factor is whether the employer saves SI contributions through deferred compensation. The relevant SI contributions are the contributions to statutory health, nursing care, pension and unemployment insurance as well as the employer’s contribution to pension insurance to occupational pension schemes and to voluntary or private health and nursing care insurance and lump-sum contributions for marginally paid employees, but not apportionments to accident insurance and under the Expenditure Compensation Act or insolvency benefit apportionments.
  • When is the SV contribution saving assessed? Actually annually – but the SV carriers mean: monthly. However, in the case of employees who receive special payments in one or more months that cause them to exceed the income threshold for pension insurance, this view leads to the payment of an allowance that, in our opinion, is not owed under labor law because – viewed over the year – there is no saving of SI contributions. The opinion of the social security institutions does not bind the labor courts. Nevertheless, the circular is likely to have considerable factual significance – e.g. also in payroll accounting software.
  • Offsetting of other grants? The question as to whether a previous employer’s allowance should be credited to the allowance under Sec. 1a para. 1a BetrAVG may be credited, harbors considerable potential for conflict. In principle, offsetting is only possible if the legal basis of the existing (voluntary) allowance explicitly refers to the SV savings. Check carefully whether crediting is possible with legal certainty.
  • How will the grant be used? The subsidy must be paid into the same contract as the deferred compensation. It is questionable how to proceed if the pension provider refuses to increase the endowment. Then a new contract is probably to be endowed. In the opinion of the BMAS, however, it is also permissible to reduce the conversion amount accordingly so that the deferred compensation amount and the subsidy result in the previous conversion amount.

Conclusion: We recommend that employers review their existing pension arrangements to determine whether there is a specific need for adjustment. The introduction or adjustment of the employer’s allowance should be carried out in compliance with the works council’s co-determination rights under Section 87 (2). 1 No. 8 and 10 BetrVG and after joint discussion of administrative issues with the pension providers.

Explore #more

08.12.2023 | PR Publications

Payout can be risky

In the current issue of Personalwirtschaft from 30.11.2023, there is a guest article by Stefan Middendorf and Gracjan Modrzyk. Some companies are once again…

07.12.2023 | PR Publications

Institutional Money – It’s all in the mix

Institutional Money 04/2023 discusses the opportunities offered by the Neighborhood Fund. The fund is ideal for real estate investors, as it is not limited to

01.12.2023 | PR Publications

WiWo: Best of Legal Awards – Philipp Glock Leader of the Year

On Thursday evening, WirtschaftsWoche honored outstanding projects and minds from consulting firms and law firms in Düsseldorf and celebrated the second Best of Professional Night…

29.11.2023 | KPMG Law Insights

Energy transition also opens up business opportunities

The energy industry’s complex, capital-intensive transformation process offers investors and banks a great deal of potential By Lars Christian Mahler and Marc Goldberg for Börsen-Zeitung,…

29.11.2023 | KPMG Law Insights

Guest article in ZURe – AI and the legal department of tomorrow

The current issue of ZURe (p. 48 ff.) contains a guest article by KPMG Partner Sina Steidel-Küster (Regional Director Southwest, Head of Stuttgart office) and…

29.11.2023 | KPMG Law Insights, KPMG Law Insights

Key Facts about the new draft of the “Data Act

On February 23, 2022, the EU Commission presented the new draft of the so-called Data Act, the “Regulation on harmonized rules for fair access to…

21.11.2023 |

Guest article in ZURe on the implementation of CSRD reporting in SMEs

The current issue of ZURe (p. 34 ff.) contains a guest article by Lena Plato (Director Legal & Compliance, FLABEG Automotive Group GmbH), KPMG Law…

20.11.2023 | Press releases

Statement by KPMG Law experts in Handelsblatt on the topic of sustainability cooperation in antitrust law

In the Handelsblatt, KPMG Law expert Jonas Brueckner is quoted in detail on the subject of cooperation in terms of sustainability. Until this summer, there…

15.11.2023 |

Legal 500 – Country Comparative Guide Germany

Gerrit Rixen and Jonas Brueckner provide an overview of the relevant legal regulations in the area of Competition & Litigation in a practical guide on…

14.11.2023 | Press releases

Tax and Law at a glance – New issue of the digital magazine “Talk

“Talk” stands for Tax and Law Compass, because that’s what the digital magazine wants to be: a navigation aid to the legal and tax aspects…


Christine Hansen

Senior Manager

Klingelhöferstraße 18
10785 Berlin

tel: +49 30 530199150

© 2023 KPMG Law Rechtsanwaltsgesellschaft mbH, associated with KPMG AG Wirtschaftsprüfungsgesellschaft, a public limited company under German law and a member of the global KPMG organisation of independent member firms affiliated with KPMG International Limited, a Private English Company Limited by Guarantee. All rights reserved. For more details on the structure of KPMG’s global organisation, please visit

 KPMG International does not provide services to clients. No member firm is authorised to bind or contract KPMG International or any other member firm to any third party, just as KPMG International is not authorised to bind or contract any other member firm.