This article will help you find out…
- what a pension refund is and give you some background information about the meaning of a pension refund
- how you can get a pension refund
- if you are eligible for a pension refund
- how to approximately calculate how much money you will receive from a pension refund
We – Amtio – a specialized service provider for bureaucratic tasks for non German speaking clients, hope to give you a good overview and valuable information for your German pension refund.
German state pension (Deutsche Rentenversicherung)
As one (out of other) part of the social security act, Germany has a mandatory state pension, the Public Retirement Insurance or Gesetzliche Rentenversicherung (GRV).1For reference, please have a look here.
Even though you worked in Germany for several years, you might have not heard about this but contributions into the German state pension are compulsory for all employees via contributions to German social security. This means that a certain percentage of the net salary is paid by both employer and employee up to a maximum contribution limit (Beitragsbemessungsgrenze) into your public pension account:2For reference, please have a look here.
- Employer: 9.3%
- Employee: 9.3%
Resulting in 18.6% in total
You can find proof of this in your pay slip.
Hence, if you have worked in Germany for some time, there is a big possibility that you paid a lot of money into your pension without even knowing it.
The German pension system intends that once you reach the retirement age of (currently) 65 years, you can claim your pension and will receive monthly payments, the amount depending on your contributions throughout your work life.
- The retirement age is gradually changing upwards as time is passing and will most likely reach 67 in a few years. 3For reference, please have a look here.
- Social security contributions are not compulsory for self-employed people in Germany, indeed, they can choose to instead join a private scheme.4For reference, please have a look here.
Pension refund in Germany before the age of 65
While one can find plenty of information about pension claim when the retirement age is reached, little information is given about the possibility of getting a pension refund before reaching the retirement age.
Based on a combination of different criteria, you have the possibility to apply for a pension refund before you reach the retirement age of 65 and receive a one-time payment of your funds. This may especially sound exciting for you, if you have stayed and worked in Germany only for a short period of time and have no intention of returning to Germany and receiving a pension here.
Calculate your possible pension refund
Please note: you will receive the contributions you made (9.3%), the other 9.3% that your employer paid into your account can’t get refunded. However, 9.3% of your net salary can still be quite a lot of money.. Find out how to approximately calculate the amount of your pension refund here.
Check if you can apply for a pension refund
To check if you fulfill the criteria to apply for a pension refund in Germany, please see this section.
Furthermore, you can find the most comprehensive document, issued by the Deutsche Rentenversicherung, about a pension refund here (.pdf download – only available in German unfortunately).
Effects of a pension refund in Germany on your future
By getting a pension refund, you will exit the German social security system. This means that all contributions for your pension made by former employers will not be accessible anymore. Furthermore, if you decide to return to Germany at some later point, your pension account will start from zero.
On the other hand, the German pension scheme does not work with interest. Therefore, it might be smarter to get a pension refund and invest your money differently, especially considering an average inflation rate of 2.2% per year. 5For reference, please have a look here.
Read more about the pros and cons of a pension refund here.
Eligibility: who is eligible for applying for a pension refund in Germany
Step by step to find out whether you are eligible for a pension refund
2.) Duration of time worked in Germany
Write down whether you worked more OR less than 5 years in Germany
4.) Write down your combination
Example: United States (= contracting state) + worked in Germany for 4 years + currently living in Canada (=contracting state)
5.) Start the path with your nationality using the graphics down below
European state citizen eligibility path
Contracting state citizen eligibility path
Non-contracting state citizen eligibility path
Ineligible for a pension refund in Germany
- You are obliged to pay into the German pension system. You are obliged to pay into the German pension system when you are an employed worker in Germany
- You are given theright to pay voluntary contributions into the German pension system. You can pay voluntary contributions…
- when you reside in Germany but you are unemployed or you are working self-employed
- when you reside in any European member state (EU), a country of the European Economic Area (EEA), in Switzerland
- when you have worked in Germany for more than 5 years and afterwards reside in one of the non-Europeansocial security “contracting states”:Please note, this is only the case if you have worked in Germany for more than 5 years (≤5 years worked in Germany means that you are not qualified for receiving a pension in Germany when the retirement age is reached. This in turn means that you are not allowed to make voluntary contributions and hence, you can apply for a pension refund if you have worked for less than 5 years in Germany and afterwards reside in a contracting state.)
Albania, Australia, Bosnia Herzegovina, Brazil, Canada/Quebec, Chile, India, Israel, Japan, Kosovo, Macedonia, Montenegro, Morocco, Philippines, Serbia, South Korea, Tunisia, Turkey, Uruguay, the United States and in the near future also: Moldova
Looking for assistance?
If you’re still not sure whether you’re eligible for a pension refund or not and would like someone to assist, click on the button below and request a free 20 minute consultation session with Amtio – a specialized service provider for bureaucratic tasks for non German speaking clients since 2015.
Calculate your approximate pension refund in Germany
How to calculate an approximate pension refund
months worked in Germany * monthly gross salary * 0,093 (9,3%) = your approximated refund
48 (months) * 4,300 (€) * 0,093 = 19,195.20 €
Please note: this calculation can only be seen as a rough estimate and orientation. Mainly because the pension system as well as it’s connected regulations are political topics which might cause chances during the next years or decades.
Pros and Cons of pension refund in Germany
|The German pension scheme does not work with interest. Therefore it might be smarter to invest your money differently, especially considering an average inflation rate of 2,2% per year.||If you return to Germany at a later point and also wish to obtain a pension when the retirement age is reached, you will start your pension “account” from scratch and most likely in total end up with less if you get a refund.7For reference, please have a look here.|
|Otherwise, you would only receive your pension at the highest rate when turning 65 (or 67).||All contributions made by your German employers – this means half of your entitled pension plan – will be payed out.|
|You obviously don’t have to wait to receive the money until you turn 65.||If you are considering moving to Germany in the near future and working for another 20 years, it is recommended to not request a pension refund because the pension payout (when the retirement age is reached) is most likely expected to be higher than a refund.|
|Applying for a pension refund does not affect a potential application for a German citizenship directly. If you’d like to apply for a German citizenship in the future, you need to live in Germany for 6-8 years straight and have a stable income. Hence, this includes paying into the pension scheme for another 6-8 years as well.|
Process: how to get your pension refund in Germany
Step by step guide
Check your eligibility
Documents and data
Get all needed documents and data ready. Find a checklist of all required documents and data here.
Fill in the form of deutsche Rentenversicherung
Please download the pension refund form here (it’s in German and English)
Submit the form
Make sure to wait 2 years after your last pension contribution until you submit the pension refund form to Deutsche Rentenversicherung. If you submit it earlier, there is a high possibility that they will not process your request.
Wait 4-6 months
After this waiting period, you will receive a notification and the money on your bank account indicated on the form from the German state insurance (Deutsche Rentenversicherung).
It can happen that the German state insurance will get in touch with you earlier if they need additional supporting documents for your request.
Expert tip: Usually, it is easier to keep track of all required documents and data needed for the application while you are still in Germany. Hence, if you already plan to apply for a pension refund when you are about to leave Germany, it makes sense to already prepare all documents and the form, to wait 2 years and then apply for a refund.
Good to know for non contracting citizens
In case you are a non-contracting state citizen and choose not to apply for a pension refund but instead wait until full retirement age for payments, we advise you to inform yourself how the German pension can be combined with other national pensions you may be eligible for.
Looking for assistance for your pension refund application?
If you don’t want to deal with this bureaucratic task yourself, we – Amtio, a specialized service provider for bureaucratic tasks for non German speaking clients since 2015, are happy to take over the process for you and get your pension refund done smoothly and easily.
References: All research made is linked or has been obtained from personal consultation sessions with DRV (Deutsche Rentenversicherung) and as well as private pension insurance companies.