German Apprentices Secure Pension Rights as Court Broadens ‘Employees’ Definition
29.06.2026 - 02:03:47 | boerse-global.de
Germany’s top labour court has handed apprentices a major victory: they are entitled to company pension benefits whenever a works agreement promises them to “employees” generally. The Bundesarbeitsgericht ruled that the term covers everyone working in the business — meaning trainees can acquire pension entitlements during their apprenticeship.
The decision adds urgency to a wider push to expand occupational pension coverage (betriebliche Altersvorsorge, or bAV). Only 52% of workers aged 25 to 67 subject to social security contributions had a bAV entitlement at the end of 2023. While sectors with strong collective bargaining — such as pharmacies — have well?established schemes, others lag behind.
Demographic pressures and skills shortages are driving change. In industries where competition for talent is fierce, a company pension has become a recruiting and retention tool. Clinics in Saxony, for instance, attract career?changers into nursing with pay of up to €2,700 and emphasise the importance of supplementary cover.
Tax rules for 2026
Clear financial parameters apply from next year. Employees can put up to 4% of the contribution assessment ceiling (€101,400 in 2026) into a bAV free of wage tax and social security contributions. A further 4% is exempt from wage tax but subject to social levies. Employers must pay a 15% top?up whenever they save social security costs through salary sacrifice.
At the same time, state pensions are rising by 4.24% on 1 July 2026. Estimates suggest that roughly 100,000 pensioners will become liable to income tax for the first time as a result. For people retiring in 2026, 84% of their pension will be subject to tax, while the lifetime tax?free allowance remains fixed in nominal terms.
Tax?privileged saving through Pensionsfonds, Pensionskassen or Direktversicherungen therefore stays a cornerstone of financial planning.
Political rift over mandatory top?ups
An expert commission has recommended linking the retirement age to life expectancy from 2032, implying an increase to 67.5 years by 2041. Chancellor Merz has signalled support.
The real flashpoint, however, is a proposed capital?funded pension. From 2028, a supplementary contribution of 2% — split equally between employers and employees — would be collected and invested. The Ifo Institute argues that younger generations bear the heaviest burden of demographic change and need relief via pooled capital.
Opposition comes from the Institute for Macroeconomics and Business Cycle Research (IMK) and the Economic and Social Sciences Institute (WSI). A study warns that the capital pension could cost up to 250,000 jobs and reduce economic output by €45 billion.
The German Trade Union Federation (DGB) and ver.di counter with a demand for compulsory occupational pensions for all workers, with mandatory employer contributions. Pension expert Axel Börsch?Supan also favours a mandatory system on international lines — but warns against keeping income?level support lines indiscriminately for all earners. Finance Minister Klingbeil has backed the push for stronger company?based provision.
