Does continued employment lead to a pension enhancement?
Someone who gets a pension and wants to keep working has the opportunity to earn extra money. Whether this arrangement also raises their pension amount depends on whether they contribute to their own pension.
Someone who works past retirement age and aims to boost their future pension needs to make their own contributions. Employer contributions alone won't upsurge the pension. This is legal and valid according to the Hessian State Social Court in Darmstadt, as stated in a verdict on Tuesday (case no. L 2 R 36/23).
Nowadays, people can carry on working beyond the age limits for retirement. The rules about supplementary income restrictions were completely eliminated at the start of the year. When someone keeps working, their employer must continue making pension contributions. Meanwhile, the employees are exempt from making contributions.
But they can also choose to stop being exempt and make additional pension payments. This is when their future pension benefits will increase. If only their employer pays the contributions, they won't count towards their pension.
A 74-year-old pensioner from Darmstadt brought the case to court. After reaching the retirement age, he continued working part-time, and his employer made pension payments on his behalf. He expected that these payments would increase his future pension, even though he hadn't paid any contributions himself.
Contributions don't need to directly impact benefits
Yet, the LSG also rejected this case. There's no requirement for pensions or other social security systems to be structured in a way where all contributions directly affect benefits, the judges in Darmstadt explained.
This approach is taken to stop companies from preferring pensioners for cost-saving reasons and blocking jobs for younger people. This objective is valid, and the law is not unconstitutional.
Additionally, the legislator has addressed the issue. Since 2017, pensioners can "give up their exemption from insurance and enhance their pension". Employer contributions would then be taken into consideration. However, in this case, the plaintiff pensioner didn't waive the exemption from insurance and hence stopped paying any pension contributions himself.
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Source: www.ntv.de
