Retirement planning · 3 min read

Comprehensive protection: with a supplementary pension fund

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.

Retirement provision is an essential topic for everyone in work. In addition to the statutory pension insurance, it can also include voluntary components that can secure your retirement income while maintaining the same standard of living. For managing directors, supplementary pension funds (Zusatzversorgungskassen) are ideally suited to improving their compulsory insurance or a company pension. We introduce the model of the supplementary pension fund and explain which advantages await you both immediately and when you retire. We also show you which tax advantages we can achieve through this form of supplementary provision in close cooperation with your tax adviser.

As an independent financial and pensions adviser, Neo Capital is the ideal partner when it comes to structuring your retirement provision sensibly from a tax perspective. Our advice is based on numbers-driven, robust strategies. In this way, we work together to shape the investment and provision strategies of wealthy individuals and provide tailored information for your individual situation. Apply for a consultation with one of our experts and find out how voluntary insurance, combined with other measures, ensures financial stability in old age.

Forms of supplementary provision for managing directors

A supplementary pension fund is a form of financial protection that is paid out in addition to the classic pension and a company pension. During your time as an employee or managing director, you can make contributions in a tax-optimised way, and these determine the level of later payouts. This form of supplementary pension helps you maintain your standard of living in retirement despite reduced earning capacity. This type of supplementary provision is particularly advantageous when a managing director takes the place of an ordinary employee. A managing director can make tax-reducing payments into their supplementary pension fund and thus benefit from their retirement provision from the very first second. This gives employers the opportunity to integrate supplementary provision into the company pension scheme as voluntary insurance. Together with a direct insurance policy (Direktversicherung) and the classic company pension scheme (bAV, betriebliche Altersvorsorge), this results in a broadly diversified retirement strategy. This means you do not have to rely on compulsory insurance, but can conveniently create your own investment profile. In addition, depending on the employer, public sector employees in Germany are automatically insured with supplementary pension institutions. Ordinary employees and managing directors can also benefit from this advantage.

Voluntary insurance with tax advantages

Depending on the federal state, contributions to supplementary pension funds can enjoy tax benefits. This allows taxable income to be reduced, which can lead to a lower tax burden for many insured persons. In addition, the investment income of a supplementary pension can be tax-free, meaning the returns are not subject to income tax. For precise details and an assessment of your individual situation, we work either with our experts or with your tax adviser. The same applies to information on payouts in retirement. These can also be taxed at a preferential rate. Feel free to ask us about the options for tax structuring; our tax advisers will support you on all topics during our cooperation. In developing their personal tax strategy, all clients also benefit from close communication with their tax office. This way, both sides know where your journey towards retirement is heading from a tax perspective. Whether you are a managing director, a public sector employee or an employee of a company: supplementary pension funds are an attractive complement to the statutory pension insurance.

Neo Capital: your partner for tax-optimised supplementary provision

The options for private and company retirement provision are many and varied. Anyone who wants to keep an overview here and also seek tax advantages alongside their provision needs individual advice. The risk of setting up your personal pension incorrectly at an early stage, and of giving away potential contributions as tax for years, is simply too great. We advise our clients comprehensively on supplementary provision and company pensions. This leaves you optimally positioned in old age, enjoying your inflation-adjusted standard of living. Are you interested in tax-optimised retirement provision? Contact us for a no-obligation initial consultation and find out how we can add sensible components to your compulsory insurance. We also offer insured persons the opportunity to compare supplementary pension institutions independently. As independent financial and pensions advisers, we choose the right model for your pension.