Does the Altersvorsorgedepot pay off alongside a company pension scheme?

Tilman Freyenhagen

Published on 14 June 2026 · Updated on 15 July 2026 · Managing Director & Partner, Alsterspree Verlag GmbH

Two strong pillars: why the AVD and the bAV aren't mutually exclusive

The Altersvorsorgedepot and the company pension scheme aren't mutually exclusive - they draw on different support mechanisms and can complement each other extremely well. The bAV scores with the employer contribution and the social-security savings during the contribution phase, while from 2027 the Altersvorsorgedepot wins out with state allowances, free choice of ETFs and high flexibility. Using both pots in parallel spreads your sources of support and gives you optimal tax diversification.

As an employee, you don't have to choose one route over the other. The statutory framework provides for separate support ceilings. Contributions to the bAV usually come directly out of your gross salary (salary conversion, or Entgeltumwandlung), which saves you tax and social security contributions. With the private Altersvorsorgedepot, you invest out of your already-taxed net income and receive a state subsidy plus tax relief in return^[1]. Both routes run on separate tracks, so the bAV doesn't reduce your private entitlement to support.

To get the best of both worlds, it's worth coordinating your contribution rates. While the bAV is especially attractive when your employer pays a generous contribution, the Altersvorsorgedepot gives you the freedom to build wealth with strong return potential. Our subsidy calculator lets you work out the effects for your situation precisely. For more in-depth questions, our knowledge section is also available to you. In addition, our independent advice service can put you in touch with licensed experts if needed.

Please note: all calculations and comparisons are for illustration only and do not constitute investment advice (not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG).

The company pension scheme (bAV): the classic route, with an employer contribution

For many employees, the bAV is a fixed part of the foundation of their personal and workplace financial security. Its core mechanism rests on so-called salary conversion: you agree with your employer to direct part of your gross salary straight into a company retirement vehicle, such as a Direktversicherung (direct insurance policy) or a Pensionskasse (pension fund). Because this contribution is withheld directly from your gross pay, your taxable income falls. You immediately save tax and social security contributions during the accumulation phase as a result.

• Tax-free and social-security-free contributions: contributions are taken directly out of your gross salary, which reduces your tax and contribution burden for the current month.
• Statutory employer contribution: through salary conversion, your employer also saves on social security contributions. Under Paragraph 1a of the Betriebsrentengesetz (BetrAVG, Germany's Company Pensions Act), they're therefore legally required to pay a contribution of at least 15 percent on your converted amount, provided they save social security contributions as a result.
• Deferred taxation: payouts in retirement are subject to full income tax as well as contributions to statutory health and long-term care insurance, which needs to be factored into the overall picture.

This mandatory 15 percent contribution acts like an immediate return boost that you could barely achieve risk-free on the open capital markets. It makes the bAV particularly worthwhile, as long as the chosen provider's administrative fees don't eat up this advantage. But this is also exactly where the classic route shows its limits: bAV providers' investment strategies are often calculated conservatively and rarely offer the full return potential of modern, broadly diversified equity ETFs.

For many employees today, the question is therefore no longer either-or, but how to combine the two intelligently. If you want to know how the bAV can best complement the state support of the new Altersvorsorgedepot, our knowledge section offers in-depth insights and structured analysis. By drawing on separate support pots, you can make flexible use of the advantages of both worlds.

The new Altersvorsorgedepot (AVD) from 2027: maximum return potential with ETFs

The new Altersvorsorgedepot and the bAV aren't mutually exclusive; they draw on different support mechanisms and, as part of a holistic retirement strategy, can complement each other extremely well. While the bAV scores mainly through the mandatory employer contribution and social-security savings during the contribution phase, from 2027 the Altersvorsorgedepot (AVD) offers maximum return potential through free ETF investment with no rigid guarantee requirements. Using both pots in parallel means benefiting from separate support routes, diversifying your investments across different asset classes, and steering your personal tax and contribution burden optimally.

Two different support routes compared

Combining both systems lets you make optimal use of each system's specific strengths. The bAV is especially attractive when your employer pays a generous contribution, since this direct investment immediately generates a risk-free additional return. The Altersvorsorgedepot, launching from 2027, in turn closes the gap for return-focused, self-directed wealth building. Because the AVD prescribes no rigid contribution guarantees, your capital flows 100 percent into low-cost ETFs or investment funds, which can close the pension gap far more effectively over the long run^[1] (not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG).

At Vorsorgedepot-Lotse, we see ourselves as your neutral guide through Germany's reformed pension landscape. In our Altersvorsorgedepot guides, we set out all the legislative changes in plain language, so you can make a well-founded decision. With our subsidy calculator, you can also directly simulate how the state subsidy affects your expected final capital. Whether you build your wealth yourself or want personal advice, combining the AVD and the bAV gives you a flexible, solid foundation for financial security in retirement.

The AVD's state subsidy in detail: making the most of the allowances

The new Altersvorsorgedepot (AVD) and the bAV are by no means mutually exclusive. In fact, they let employees combine state support optimally via two entirely separate routes, giving their retirement provision broad foundations. While the bAV works mainly through gross salary conversion and the mandatory employer contribution, the AVD relies on direct state allowances on your private contributions. To work out your personal support rate precisely, our subsidy calculator is available to you.

• Minimum contribution: you must pay an own contribution of at least 120 euros a year to be eligible for state support at all.
• Grundzulage: the state grants an allowance of 50 percent on the first 360 euros of own contribution, plus a further 25 percent on amounts up to 1,800 euros, equivalent to a maximum Grundzulage of 540 euros a year.
• Kinderzulage: for every child entitled to Kindergeld (child benefit), you receive additional support of up to 300 euros a year, paid at a 1:1 ratio to your contributions.
• Berufseinsteiger-Bonus (the career-starter bonus): savers who haven't yet turned 25 when they sign the contract receive a one-off additional grant of 200 euros.

This structure shows just how attractive the AVD can be as a complement to the bAV. While the bAV gives you immediate savings on tax and social security contributions during the contribution phase, the AVD allowances flow directly into your account and can be invested there for strong returns in ETFs. The separate support pots let you use both systems in parallel, maximising your tax and investment diversification. We recommend familiarising yourself in more depth with the tax details via our knowledge section^[3]. Please note: not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Comparing the two systems directly: tax logic and social security contributions in focus

The new Altersvorsorgedepot and the company pension scheme are by no means mutually exclusive; they complement each other extremely well. While the company pension scheme is supported mainly through tax- and social-security-free gross contributions under salary conversion, the Altersvorsorgedepot is based on net contributions with a direct state allowance or the Sonderausgabenabzug^[3]. Anyone who cleverly combines both models draws on two separate support pots while diversifying their tax exposure in the later payout phase.

Gross vs net support: two levers for your wealth

The crucial difference lies in the flow of payment: with the bAV, you convert part of your gross salary. This lowers your taxable income and you immediately save income tax and social security contributions. With the Altersvorsorgedepot, by contrast, you invest out of your already-taxed net income. In return, you get state allowances credited directly, or you claim the contributions for tax purposes. These separate mechanisms mean you can make full use of both support ceilings, without either allowance reducing the other.

For employees, this coexistence is highly attractive. You combine the lower-risk, employer-supported pillar with an opportunity-focused, high-return account. Our subsidy calculator lets you calculate the state subsidy exactly. You can find out how to build this mix for your personal tax situation in our neutral Altersvorsorgedepot guides. For detailed advice, our portal is also available to you, connecting you with independent advice on request.

When combining the bAV and the AVD is especially worthwhile for employees

The company pension scheme (bAV) and the private Altersvorsorgedepot (AVD) aren't mutually exclusive. They draw on completely different support routes and can complement each other extremely well for employees^[4]. While the bAV is financed directly through your gross salary and benefits from state savings on social security contributions and tax, the private account launching from 2027 offers a highly flexible ETF investment plus state allowances. Anyone who cleverly combines both routes spreads their sources of support and diversifies their retirement provision.

When does using both models in parallel pay off?

A combination is especially attractive when your employer pays a generous contribution to the bAV. The statutory minimum contribution of 15 percent often isn't enough to offset the costs of conventional bAV contracts, but with more generous contributions, the bAV is a solid building block^[4]. At the same time, the AVD lets you invest without limit in high-return, low-cost ETFs and secure the state Grundzulage. This lets you bypass the rigid guarantee requirements and high administrative costs of classic insurance products, while building an independent, liquid ETF portfolio in parallel.

If you're unsure how best to split your contributions, a close analysis of your individual tax situation will help. Use our knowledge section to study detailed comparisons, or work out your personal support rate directly with the subsidy calculator. For a tailored solution and the optimal balance between both layers, our independent advice service is also on hand (not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG).

Analysing the tax burden in retirement: understanding deferred taxation

Both the Altersvorsorgedepot and the bAV are based on the principle of deferred taxation. For you as an employee, this means: during your active working life, you save tax and, where applicable, social security contributions on your contributions, while payouts in retirement are taxed at your personal tax rate. Because the tax rate in retirement is usually lower than during working life, this produces a noticeable tax advantage for many savers. During the accumulation phase, all returns and dividends within the Altersvorsorgedepot also remain tax-free.

Combining both systems allows for a strategic diversification of your tax and contribution burden. While the bAV offers immediate savings on social security contributions, the Altersvorsorgedepot, launching from 2027, scores with flexible ETF investment, no contribution guarantees, and no later health insurance liability on payouts. The Federal Ministry of Finance (BMF) confirms that deferred taxation continues to apply unchanged to the new model, to preserve the appeal of private provision^[3].

To split your contributions optimally, you should closely analyse your individual tax situation and your employer's bAV contribution. Our knowledge section gives you in-depth comparisons of these mechanisms. To run calculations for your personal support, our neutral subsidy calculator is available to you. That way you plan your retirement provision on a source basis and make a well-founded decision for your financial future.

Your path to the optimal combination: how to plan your retirement strategy

The choice between the company pension scheme and the new Altersvorsorgedepot doesn't have to be either-or. Anyone who cleverly combines both support routes benefits from tax advantages, state allowances and broad diversification of their own wealth. To determine the mix that's optimal for you, a structured approach that takes account of your individual professional and financial situation is recommended.

1. Check the employer contribution: find out exactly how much your employer contributes to your company pension scheme. By law, a salary conversion usually requires a minimum contribution of 15 percent. If your employer's contribution is significantly above that, expanding your company pension scheme is especially worthwhile.
2. Work out your support rate: use our subsidy calculator to work out the state allowance support and the tax effects of the new account for your income and family situation.
3. Split your contributions: arrange your payments so that you first exhaust the maximum supported allowance of your company pension scheme, provided the employer contribution is attractive. Any remaining savings then flow into the Altersvorsorgedepot, so you benefit from high-return ETF investment and flexibility with no contribution guarantees.
4. Use independent advice: if you're unsure about tax deductibility or deferred taxation, you should bring in expert advice.

The dual retirement route for maximum flexibility

This combination lets you make optimal use of two mutually independent support pots. While the company pension scheme is deducted directly from your gross salary, reducing your social security contributions, from 2027 the Altersvorsorgedepot gives you a low-cost, capital-market-based investment with state support. Our knowledge section has further detailed analysis and legal background to serve as your reliable guide. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG. All mathematical comparisons and projections are for illustrative purposes only.