Which form of company pension scheme is most suitable for my employees?
July 2, 2024 | 30,00 EUR | answered by Claudia Köhler
Dear Tax Advisor,
I am Dora Ackermann, the owner of a medium-sized company with 30 employees. In our company, we offer our employees the opportunity of company pension schemes. So far, we have opted for a direct insurance policy, as we believed this to be the best option. However, I am not sure if this is actually the most sensible form of company pension scheme for my employees.
I am concerned that the direct insurance policy may not offer the optimal benefits for our employees, and that there may be better alternatives that we should consider. Since pension planning is an important topic and I want to ensure that our employees are as well protected as possible, I would like to hear from you which form of company pension scheme would be most suitable for my employees.
Could you please show me different options for company pension schemes and explain the advantages and disadvantages of each form? What tax aspects need to be considered and how can we ensure that our employees' pension schemes are optimally designed?
I thank you in advance for your help and look forward to hearing from you.
Best regards,
Dora Ackermann
Dear Ms. Ackermann,
Thank you for your inquiry regarding company pension plans for your employees. It is very commendable that you are considering how to best secure your employees. Company pension plans are an important part of employee retention and can significantly contribute to financial security in retirement.
The direct insurance plan that you have chosen so far is a popular form of company pension plans. With direct insurance, the employer takes out a life insurance policy on the employee's life. Contributions are made either by the employee, the employer, or both. Contributions to direct insurance plans are tax and social security free up to certain limits. In retirement, the insurance sum is then paid out in the form of a lifelong pension or as a lump sum.
There are other forms of company pension plans that you can consider. One option is the support fund, where the employer contributes to a pension fund that ensures the retirement provision of employees. Pension funds and pension schemes are also forms of company pension plans, where employer contributions are paid into separate institutions to ensure the retirement provision of employees.
Each form of company pension plan has its advantages and disadvantages. For example, direct insurance offers high flexibility in designing insurance benefits and contribution payments. However, the benefits in retirement depend on the development of the capital markets, which carries a certain risk. On the other hand, support funds and pension schemes often have defined benefits and guarantee a certain level of pension in retirement, but contributions are usually not tax and social security free.
To find the optimal form of company pension plan for your employees, it is important to consider the individual needs and desires of your employees. Tax aspects also play an important role in deciding on a specific form of company pension plan. It is advisable to seek advice from a tax advisor or insurance expert to find the best solution for your company and your employees.
I hope that this information has been helpful to you. If you have any further questions or would like a more detailed consultation, I am at your disposal.
Yours sincerely,
Claudia Köhler
