TRANSPARENTA launches innovative pension model - fact sheet on stepped retirement pensions

The phased old-age pension is a new form that retirement benefits to be received as a pension. And this is how it works:

The first stage is the life-long old-age pension, which covers the statutory minimum benefits. The second stage is a pension that is paid out for 20 years and whose residual value is paid out to survivors in the event of death. The third level works analogously to the second, but the payout period is 10 years, which results in a higher monthly pension.

At the time of retirement, all parts of the pension are fixed as binding. The total old-age pension is therefore derived from the pension components for up to three levels:

1. Lifelong pension, which is extended beyond all levels and must include the statutory minimum benefit;
2. Continuing part of the second-level pension, which is paid out until the 20th pension reference year is completed;
3. Continuing pension portion of the third stage, which is paid out by the end of the 10th pension reference year.

You are free to determine the distribution of your saved retirement capital between the three pension levels. This is subject to the proviso that the lifetime pension portion of the first level must be at least the same as the statutory minimum pension (BVG minimum).

‍What is the big advantage?‍‍

‍‍If a recipient of the phased retirement pension dies before the end of the 10th or 20th pension year, these pension shares that have not yet been paid out will in any case be paid out to the regulatory beneficiaries. In the case of persons without a spouse, children, parents or siblings therefore also receive the pensions that have not yet been paid out as a death benefit.

For the life-long pension portion of level 1, the beneficiary spouse/partner pension of 60% is normally insured (with the option to increase the entitlement to 80% or 100%).

Who is this attractive for?

The phased old-age pension is particularly interesting for insured persons who have so far preferred a lump-sum payment over pension with the motive;

• not to lose their saved capital in the event of an early death and to secure it with the capital withdrawal to their close relatives; and/or
• who want a higher income at the start of their retirement life.

Interested? Detailed information can be found in regulations as well as in our fact sheet.