Altersvorsorgedepot or company pension scheme compared

Tilman Freyenhagen

Published on 15 June 2026 · Updated on 15 July 2026 · Managing Director & Partner, Alsterspree Verlag GmbH

1. Altersvorsorgedepot versus bAV: the basic system comparison

Whether the new Altersvorsorgedepot (AVD) or a company pension scheme (betriebliche Altersvorsorge, bAV) is the better choice usually comes down, in practice, to the size of the employer contribution. If your employer contributes substantially to your company pension, that route is financially hard to beat during the contribution phase. But if what matters to you is a highly flexible, high-return investment with full portability when you change employer, the Altersvorsorgedepot — available from 2027 — offers clear advantages.

The company pension scheme rests legally on the Betriebsrentengesetz (Germany's Company Pensions Act), which mandates an employer contribution of 15 percent on salary conversion (Entgeltumwandlung), provided the employer saves social security contributions as a result^[1]. This lever produces an immediate return effect on contributions. Set against that, however, is the deferred tax and levy burden in the payout phase: alongside income tax, the later company pension is often also subject to the full health and long-term care insurance contributions in retirement, which reduces the actual net pension. Portability when changing jobs, too, is often bound up with bureaucratic hurdles or the loss of the original tariff.

The Altersvorsorgedepot, by contrast, takes the private route: as the state-recognised successor to the Riester-Rente (Germany's existing subsidised private pension), it supports self-directed, state-backed retirement provision from 1 January 2027 without an expensive insurance wrapper. It stands out for its free choice of low-cost ETFs and full portability, so your account is unaffected by a change of employer. For a detailed breakdown of your individual subsidy options, it's worth a look at the subsidy calculator. Comprehensive analysis of the legal framework and comparisons of subsidised products can also be found on the knowledge section.

The system features shown in the comparison table are for general information only and do not constitute investment advice (not investment advice within the meaning of § 1 (1a) no. 1a KWG).

2. The new Altersvorsorgedepot from 2027: how it works and its allowances

With its launch on 1 January 2027, German lawmakers are fundamentally reforming private retirement provision and introducing the new Altersvorsorgedepot (AVD). Unlike the old Riester-Rente, this model drops the contribution-guarantee requirement entirely^[2]. For you as an employee, that's a historic system change: your savings contributions can flow directly into high-return ETFs and equity portfolios without expensive guarantees, substantially boosting your investment's long-term growth potential. This state-subsidised account forms a highly flexible pillar of your private retirement provision.

The state subsidy in detail

The account's financial foundation rests on an attractive, direct state top-up subsidy. If you invest the maximum subsidised personal contribution of 1,800 euros a year, you receive an annual Grundzulage (the basic state allowance) of up to 540 euros credited directly to your account^[2]. For families, this benefit rises substantially through additional Kinderzulagen (child allowances) of up to 300 euros per child. The subsidy is granted without red tape and directly reduces your own savings burden, while returns are reinvested tax-free during the accumulation phase.

• State Grundzulage: up to 540 euros in allowance a year on an annual personal contribution of 1,800 euros.
• High-return ETF investing: no contribution guarantees, allowing an unrestricted equity allocation for long-term wealth building.
• High portability: easy transfer of accumulated capital when you change jobs or providers, without losing any entitlements you've built up.

To check whether this model or the company pension scheme (bAV) is more advantageous for your individual situation, a close comparison is worthwhile. Our subsidy calculator helps you work out your expected allowances precisely. While the account offers maximum flexibility, with the company scheme it mainly comes down to the size of the employer contribution. Not investment advice within the meaning of § 1 (1a) no. 1a KWG.

3. The company pension scheme: saving tax and social security contributions

The company pension scheme (bAV) is an established pillar of retirement provision for employees. The most commonly used route is salary conversion (Entgeltumwandlung), where part of your gross salary is converted directly into contributions to a Pensionskasse (pension fund), a Pensionsfonds (pension fund) or a Direktversicherung (direct insurance policy)^[3]. The big advantage lies in the immediate relief: up to 4 percent of the statutory pension insurance's contribution assessment ceiling — 101,400 euros in 2026 — can be invested free of tax and social security contributions^[4]. In 2026, that amounts to up to 4,056 euros a year, or 338 euros a month^[5]. Detailed comparisons of these allowances and their pros and cons can be found in the knowledge section.

• Gross-salary effect: contributions are deducted directly from your gross salary, immediately reducing your taxable income for the current year.
• Social security savings: because your gross salary is reduced, your monthly contributions to health, pension, long-term care and unemployment insurance also fall, within the statutory ceilings.
• Statutory employer contribution: on a salary conversion, your employer is legally required to add a contribution of at least 15 percent of the converted salary, provided they save social security contributions as a result.

Combining the tax saved, the reduced social security contributions and the employer contribution, you effectively pay only part of the contribution out of your own pocket. The principle of deferred taxation applies, however: in retirement, payouts from the bAV must be taxed in full, and members of the statutory health insurance scheme generally owe health and long-term care insurance contributions on them. For a precise calculation of your personal subsidy rate and a comparison of the bAV with the flexible options of the new Altersvorsorgedepot, our subsidy calculator is available to you. Note: all tax and social-security parameters shown are for illustration only and are non-binding. Not investment advice within the meaning of § 1 (1a) no. 1a KWG.

4. The bAV's lever: when the employer contribution tips the balance

In weighing up the company pension scheme (bAV) against the new Altersvorsorgedepot from 2027, one factor plays the decisive role: your employer's contribution. The Betriebsrentengesetz obliges companies to pay a minimum contribution of 15 percent on a salary conversion, provided they save social security contributions as a result^[6]. But this statutory minimum often only offsets the drawbacks you face from later deferred taxation and full health insurance contributions in retirement. The new Altersvorsorgedepot (AVD) — the state-subsidised successor to the Riester-Rente — offers high flexibility and high-return investment options from the outset by comparison.

When does a company pension really pay off?

An employer contribution of 20 percent or more is regarded in financial mathematics as the critical threshold. If your employer's contribution is at this level or above, the bAV is hard to beat during the pure contribution phase. If, for example, your employer adds 50 percent, you get an immediate return that you couldn't achieve risk-free on the open capital market even with broadly diversified ETFs (note: this is a purely illustrative worked example. Not investment advice within the meaning of § 1 (1a) no. 1a KWG.). But if the contribution is only the statutory 15 percent, this advantage shrinks considerably. In that case, the Altersvorsorgedepot — which allows a tax-subsidised, free choice of ETFs without high insurance costs — may be the higher-return choice over the long run.

In summary: if your employer pays a generous contribution, you should prioritise using that lever within the company pension scheme. For additional private provision, or if your employer offers only the statutory minimum, the Altersvorsorgedepot is a highly flexible alternative. Use the subsidy calculator on our portal to work out your individual subsidy and pension effect precisely. You'll find further information and comparisons in our knowledge section.

5. Portability when changing jobs: flexibility across your career

Changing jobs is a normal part of a working life in the modern labour market. With the company pension scheme (bAV), however, this dynamic regularly confronts employees with significant bureaucratic hurdles. Because the bAV is an employment-law commitment tied to the specific employment relationship, it can't simply be taken along when you leave the company. The Betriebsrentengesetz does provide a statutory right to transfer the so-called transfer value to your new employer, but this process requires the consent of all parties involved, is bound by tight deadlines, and can come with noticeable losses through transfer costs^[7]. If the new employer doesn't agree to take on the old contract, the capital often remains, contribution-free, in the old contract, where it continues to be eroded by ongoing administration fees.

By direct comparison, the new Altersvorsorgedepot from 2027 proves to be the markedly more flexible solution for mobile employees. Because it's a purely private, state-subsidised retirement product held directly in your own name, it's completely unaffected by a job change. You have to negotiate no new contracts and file no burdensome administrative applications. The capital you've built up stays in your own hands and keeps working, without interruption or tax disadvantages, in the ETFs you've chosen. On our knowledge section we give you comprehensive information on all the tax parameters of the new reform. To find out which route is mathematically more advantageous for your personal career path, you can use the subsidy calculator, which gives you a transparent comparison of both retirement routes. Please note: not investment advice within the meaning of § 1 (1a) no. 1a KWG.

6. Tax treatment in the payout phase: deferred taxation

A crucial factor in long-term retirement planning is the tax treatment of payouts in retirement. Both the Altersvorsorgedepot and the company pension scheme (bAV) are based on the principle of deferred taxation. That means you can pay in your contributions during the accumulation phase tax-free or with tax support. Only in retirement, when payouts are made to you, do the sums you receive become subject to your personal tax rate as income. Because that tax rate is usually markedly lower in retirement than during your working life, you benefit from a noticeable tax effect with both models.

Despite this similarity, there's a serious difference in social security contributions in retirement that has a substantial impact on your net pension. While company pensions from a bAV are fully subject to health and long-term care insurance contributions for pensioners with statutory health insurance, the new Altersvorsorgedepot is exempt from statutory health insurance contributions^[2]. With the bAV, you have to pay the full health insurance contribution and long-term care insurance contribution — currently around 18 to 19 percent — on payouts above the statutory allowance. This noticeably reduces the actual return on company pension provision in the payout phase.

When weighing this up, you should therefore set the bAV's high subsidy rate in the accumulation phase, via the employer contribution, against the later tax and levy burden in retirement. For a well-founded decision, it's worth running individual calculations. Feel free to use our subsidy calculator to work out the exact effects of the state allowances, or read up in detail in our knowledge section.

Not investment advice within the meaning of § 1 (1a) no. 1a KWG. Tax rules depend on the customer's individual circumstances and may be subject to future changes.

7. Worked example for employees: a direct comparison of the two models

To make the difference between the company pension scheme (bAV) and the new Altersvorsorgedepot from 2027 — introduced on 1 January 2027 — tangible, let's look at an average employee with a net monthly outlay of 100 euros. With the bAV, contributions come directly out of gross salary through salary conversion. Thanks to the tax and social security savings plus the statutory employer contribution of at least 15 percent, around 200 euros a month can be invested in the contract for a net outlay of 100 euros^[8]. With the Altersvorsorgedepot, you invest the 100 euros out of your already-taxed net income. Here, you receive the new state allowance of up to 540 euros a year paid directly into your account^[8].

Comparing the savings models at a glance

The bAV's lever lies mainly in the contribution phase: thanks to the strong gross-to-net effect and the employer contribution, your capital starts out with a clear head start. In the payout phase, however, you have to pay full tax on the bAV and, as a rule, health insurance contributions on top. The Altersvorsorgedepot, by contrast, scores with extremely low costs, a free choice of ETFs and a flexible payout phase from age 65^[8]. Your account also stays fully intact when you change jobs. To find out which model delivers the higher return for your personal income and family situation, you can use our subsidy calculator or read more in depth in our Altersvorsorgedepot guide.

8. The combination strategy: smartly combining both pillars

If your personal savings budget allows, you don't necessarily have to choose just one of the two routes. A well-thought-out combination strategy lets you profitably combine the specific advantages of the company pension scheme (bAV) and the new Altersvorsorgedepot. As a reliable guide through Germany's complex retirement-provision landscape, we recommend systematically layering the state subsidies and attractive employer benefits to get the maximum result out of both systems.

The golden rule for forward-thinking employees is always the same: use your employer's free money first. The statutory employer contribution of at least 15 percent on salary conversion is an extremely powerful lever for your return during the crucial accumulation phase, since it directly boosts your own savings rate^[6]. If your employer voluntarily adds even more on top, the bAV is hard to beat for solid basic retirement cover. Once you've fully exhausted this favourable contribution, you should direct every further available euro into the markedly more flexible Altersvorsorgedepot. Here, from launch in 2027, you benefit from a free choice of ETFs, minimal account fees and unrestricted portability if you change jobs in future. On our knowledge section, we've laid out these benefits for you in detail.

1. Check your bAV employer contribution: find out from your HR department exactly how much your employer adds to your salary conversion. If this contribution is significantly above the statutory minimum of 15 percent, you should definitely prioritise and max out this part of your savings.
2. Set up an Altersvorsorgedepot: from 2027, direct your remaining free savings budget consistently into the Altersvorsorgedepot. That way you secure the state allowances and invest directly in global capital markets without expensive insurance wrappers.
3. Run the numbers: use our interactive, source-based subsidy calculator to work out the expected subsidy effect, projected final capital and cost savings for your personal retirement situation precisely.

If you're unsure about the optimal split of your budget, we're happy to connect you, via our independent advice service, with qualified, licensed financial advisers for a free initial consultation. Please always note: all the example calculations, scenarios and model calculations shown here are for illustration only and at no point constitute legal or financial investment advice within the meaning of § 1 (1a) no. 1a KWG.