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bAV – company pension scheme for employers
Strengthen your attractiveness as an employer with a legally secure and tax-optimised company pension scheme. We accompany you from strategy development to complete implementation.
Briefly explained
The company pension scheme (bAV) is a pension scheme promised by the employer. 2026 are up to 8,112 € per year tax-free and up to 4,056 € free of social security contributions; In the case of salary sacrifice (Entgeltumwandlung), the employer pays at least 15 % subsidy. JCD Strategie & Consulting GmbH has been advising employers across Germany for over 22 years.
bAV in numbers 2026
| calculation size | Value 2026 |
|---|---|
| Pension insurance contribution assessment limit (BBG RV) | €101,400 / year |
| bAV tax-free (8% BBG, § 3 Nr. 63 EStG) | €8,112 / year |
| bAV exempt from social security contributions (4% BBG) | €4,056 / year |
| Annual salary limit (JAEG) | €77,400 / year |
| Employer subsidy for salary sacrifice (Entgeltumwandlung) (§ 1a Abs. 1a BetrAVG) | at least 15 % |
Frequently asked questions about company pension schemes
Who is liable if the company pension scheme is implemented incorrectly in the company?
The employer. He is responsible for the promised benefits even if he uses an external pension provider (§ 1 Abs. 1 Satz 3 BetrAVG). Typical liability risks include a lack of employer subsidies, unclear or missing pension regulations and insufficient information for employees.
What implementation methods are there in the company pension scheme?
There are five: direct insurance, pension insurance institution (Pensionskasse), pension fund (Pensionsfonds), support fund (Unterstützungskasse) and direct commitment (pension commitment). They differ in terms of tax, social security, accounting and liability. Which path is right depends on the size of the company, target group and existing commitments.
What do I have to inform employees about the company pension scheme in writing?
If the company pension scheme is carried out via a pension provider, the employer must provide the name and address of this pension provider in writing in accordance with the Evidence Act (§ 2 Abs. 1 Satz 2 Nr. 13 NachwG). A clear pension plan also ensures that rules are comprehensible and uniform for everyone.
Is there funding for low-income employees?
Yes. If the employer pays into a company pension scheme for low-income employees in addition to their wages, they receive 30% of this back through wage tax (§ 100 EStG). In 2026, this applies up to a monthly salary of 2,575 euros and a contribution of up to 960 euros per year; From 2027 the limits will increase due to BRSG II.
Status: October 2026. General information – no legal or tax advice in individual cases.
Why company pension scheme?
Employee retention
Increase the loyalty of your employees through attractive additional benefits.
Tax benefits
Take advantage of tax incentives and reduce additional wage costs.
Legal certainty
Meet all legal requirements and minimize liability risks.
Our company pension benefits
Strategy development & needs analysis
Individual analysis of your company situation and development of a tailor-made company pension strategy.
Legally secure pension scheme
Creation and implementation of legally secure pension regulations in accordance with current legal requirements.
Tax optimisation
Optimal use of tax incentives and minimization of additional wage costs.
Digital administration
Modern IT solutions for efficient administration and legally compliant documentation.
Employee communication
Professional information and advice for your employees on company pension options.
Ongoing support
Continuously monitor compliance and adapt to changes in the law.
Frequently asked questions about company pension schemes
What are the five ways to implement company pension schemes?
The bAV has five implementation methods according to BetrAVG: direct insurance, pension insurance institution (Pensionskasse), pension fund (Pensionsfonds), direct commitment and support fund (Unterstützungskasse). Direct insurance is the most common and easiest to implement. Provident funds offer maximum flexibility and unlimited tax deductibility, but require external sponsors. The choice depends on the size of the company, tax optimisation goals and administrative effort.
What employer obligations exist when it comes to company pension schemes?
Since 2019, employers have had to pay at least a 15% subsidy for salary sacrifice (Entgeltumwandlung) (§ 1a Abs. 1a BetrAVG). In addition, there is an obligation to provide information in accordance with § 1a Abs. 1 BetrAVG: Employees must be informed about their rights to salary sacrifice (Entgeltumwandlung). The Evidence Act 2022 requires written documentation of all company pension agreements. Failure to do so can result in fines and claims for damages with a 30-year statute of limitations.
How high are the tax-free contributions to the bAV 2026?
2026 company pension contributions up to 8% of the BBG are tax-free (€8.112 annually or €676 monthly). In addition, 4% of the BBG (€4.056 annually or €338 monthly) remains exempt from social insurance. These limits apply to direct insurance, pension insurance institution (Pensionskasse) and pension fund (Pensionsfonds). Provident funds and direct commitments are subject to other regulations with potentially higher allowances in accordance with § 4d EStG.
What is the difference between salary sacrifice (Entgeltumwandlung) and employer-financed company pension scheme?
With salary sacrifice (Entgeltumwandlung), the employee foregoes his salary in favor of company pension contributions. The employer must contribute at least 15%. With employer-financed BAV, the employer pays the contributions in full, without a reduction in salary. Both options are attractive from a tax perspective, but the employer-financed option significantly strengthens employee loyalty and avoids the problem of falling net pensions due to social security contributions.
Which company pension scheme implementation methods are protected from insolvency?
Direct insurance, pension insurance institution (Pensionskasse) and pension fund (Pensionsfonds) are automatically protected from insolvency because the claims are externally insured. The Pension Security Association (PSVaG), which has been insuring all benefits in the event of employer insolvency since 1974, is responsible for direct commitments and support fund (Unterstützungskasse)s. The PSVaG is financed by contributions from all employers using these implementation methods and guarantees 100% security of pension claims.
How does bAV affect the statutory pension?
Deferred compensation reduces the salary subject to social insurance contributions and thus the payments into the statutory pension insurance. For every €100 in monthly salary sacrifice (Entgeltumwandlung), the future statutory pension falls by around €4-5. However, this effect is more than offset by the company pension benefit and the 15% employer subsidy. Employer-financed company pension schemes completely avoid this pension reduction effect because there is no salary sacrifice.
Legal basis: Company Pension Act (BetrAVG), Income Tax Act (EStG) § 3 Nr. 63, § 4d, Social Code (SGB) IV § 1 Abs. 1 Nr. 9, Evidence Act (NachwG) 2022. All information is based on the current legal situation 2026 (as of: October 2026) and are provided without guarantee.