Retirement planning · 3 min read

Equity pension 2023: long-term wealth building for retirement

This guide refers to German law and the German tax system. It is a translation of our German original and does not replace individual tax or legal advice.

Many people view the development of the pension system with great concern, which is why the new equity pension (Aktienrente) for 2023 marks a milestone for Germany. By contrast, the model of an in-company equity pension is not only a classic way of building equity reserves, but can also be used for tax optimisation and within your own company. In this article, we introduce the equity pension at both private and company level. We also explain how, as a managing director, you can make the company pension scheme work optimally for you.

As an independent investment adviser, Neo Capital supports clients in structuring wealth building and protection over the long term and in a tax-optimised way. We rely on proven methods of retirement provision and coordinate our decisions with your tax adviser. In this way, we lay the foundation for your tax-optimised retirement provision and multiply your payments from the classic pension system.

The possibilities of the equity pension in the German pension system

Anyone following the current debate on the equity pension will view the Federal Government's plans to stabilise the German statutory pension insurance (Deutsche Rentenversicherung) with scepticism. Federal Finance Minister Christian Lindner (FDP) presents the equity pension as "partly credit-financed" with ten billion euros, in order to strengthen the pension fund with returns from the capital market. Yet high earners have access to a much more efficient way of raising their own pension level. With a contribution to a company pension scheme (bAV, betriebliche Altersvorsorge) or a Rürup pension paid from gross salary, almost half of the contributions can be recovered through income tax. While the Federal Government's draft bill provides for an earmarked investment in favour of the general pension system, contributions to a company pension scheme or Rürup pension allow investment in freely selectable funds or an ETF savings plan. This structure is available to you as a managing director or well-paid employee before retirement, which means more flexibility with continued insolvency protection and optimal tax refunds. It quickly becomes clear that this model of a company equity pension, with freely selectable shares and funds, can be considerably more profitable than relying on "generational capital" (Generationenkapital) within the classic pension insurance.

Equity pension with tax-saving and investment optimisation models

Criticism of Germany's changing pension system is wide-ranging. Contributors regard the idea of a debt-financed sum in the billions as risky and are therefore much more likely to look into the possibilities of a company pension scheme. Since investing in shares for retirement can be ideally integrated into this, you do not have to rely solely on the Federal Finance Minister's idea of an equity pension. As a managing director, investing in a company pension scheme allows a 100% equity allocation as well as the option to take a capital sum (Kapitalwahlrecht). This means you decide for yourself whether you want to receive your money as a lump sum, in tranches or monthly. You thus enjoy higher contract and pension values, one of the greatest advantages of the bAV, which is not available to ordinary employees. A key advantage of the company pension scheme over the equity pension is the annual tax kickback. With a 46% refund of your contributions, you receive up to €12,202.88 back through your income tax. This amount can ideally be invested in property or a share portfolio, which raises your pension level further. Thanks to the accumulated capital and interest income, as a managing director you can disregard the statutory pension, along with the idea of an equity pension. As you can see, the pension reform confirms the fund and equity pension approach of many private investors.

Neo Capital: your expert for an equity pension within your bAV or fund-based pension

Introducing a tax-optimised company pension scheme can pose major challenges for managing directors and well-paid employees. We support our clients in securing their own pension through ongoing, optimised investments in the capital market. We advise you comprehensively and develop your individual concept in cooperation with your tax adviser. Together, we design a system that is insolvency-protected and geared sustainably towards your retirement. We also invest the proceeds from tax savings in property investments and share portfolios. Are you interested in advice on company pension schemes and the equity pension? We will be happy to look at your individual situation in a free initial consultation and find out how we can best support you. Our experts ensure that your pension contribution is ideally taken into account both within the company and in your income tax. Sign up for a no-obligation consultation. We look forward to supporting you in structuring your pension and on the way there.