Kuprevich / ShutterstockNowadays it is absolutely normal to change jobs several times in your professional life. Either because the employee is forced into the situation of needing a new job, or because a career or salary increase beckons. But there is one thing you shouldn’t forget when changing jobs. You have to discuss it directly with the new employer, otherwise you will lose hard cash.
Company pension schemes have their pitfalls when changing jobs
Anyone who has a company pension must urgently think about it when changing jobs. How many thoughts depends on which of the various structures of the company pension you use. There are basically three variants of company pension schemes: First, the Deferred compensation. Means: A certain amount is paid into an insurance contract directly from your gross wage. You are always entitled to these services and you do not have to observe any deadlines or work for a certain number of years in a company. In addition to deferred compensation, there is also the possibility that the employer and the employee jointly finance the company pension or the employer even pays the amounts alone, in addition to the salary. However, you have no legal entitlement to this, you have to observe the agreements in your employment contract.
Changing jobs usually brings disadvantages when it comes to company pensions
Should you change jobs, you may be able to continue the company pension contract with the conversion of remuneration. If the new employer agrees: Everything is fine. But if the new boss refuses, you can continue to pay the contract privately and from the net wage. But this is usually only worthwhile if the contract is older and therefore pays high interest. Alternative: make the contract exempt from contributions and later draw the pension from it. These options are also available for jointly and employer-financed contracts, but with different requirements. The employee must have been employed for at least five years and at least 25 years old. If the contract was signed before 2009, even at least 30 years old. The benefits are only vested after these five years. Since the insurance companies deduct their commission and administration costs from the premiums, especially in the first few years, those with premature termination of the contract are lost. You can discuss individual deadlines directly with your employer.
Lower interest rates, older age, more contributions, less pension
With a new contract after a job change, there are further cost traps: On the one hand, the guaranteed interest rates are much lower today than they were a few years ago and, on the other hand, the contributions for death and occupational disability increase as you get older. Therefore, when changing jobs, it is essential to consider the company pension, otherwise you will have to foot the bill for forgetting these details despite a possibly higher salary for the company pension.
This article appeared on NewsABC.net in November 2019. It has now been reviewed and updated.