1: WEBTEXT/25018/64835/E92DEU01.htm
Germany. Pension Reform
NATLEX database

GERMANY

Pension Reform Act 1992.1
         
(Dated 18 December 1989. Bundesgesetzblatt, 28 December 1989, No. 60, pp. 2261­2396.)


TABLE OF CONTENTS

CHAPTER I. PERSONS INSURED (Sections 1­8)

CHAPTER II. BENEFITS 9­124

CHAPTER III. ORGANISATION AND DATA PROTECTION 125­152

CHAPTER IV. FUNDING 153­227

CHAPTER V. SPECIAL REGULATIONS [228­319]

CHAPTER VI. PENALTIES [320]


CHAPTER I. PERSONS INSURED

Division 1. Statutory insurance coverage

Section 1. Employed persons. The following persons shall be compulsorily insured:

The requirement that persons who are employed for remuneration or as part of their training shall be insured extends also to German citizens employed abroad by an official organisation representing the Federal Republic of Germany or one of the Länder, or employed by their directors, German members or civil servants. Members of the board of directors of a limited liability company shall not be compulsorily insured. The persons specified in clauses 2 to 4 of section 1 shall be regarded as employed persons within the meaning of the Pension Insurance Act.

Section 2. Self­employed persons. The following self­employed persons shall be compulsorily insured:

Section 3. Other insured persons. Persons shall be compulsorily insured during the time when:

Persons performing military or substitute civil service, who, during the period of their service, receive remuneration or benefits for self­employed persons under section 13(a) of the

Security for Maintenance Act, shall not be compulsorily insured under clause 2 of sentence 1. Employment or self­employment shall be regarded in these cases as uninterrupted. The insurance obligation under clauses 3 and 4 of sentence 1 shall also extend to persons who have their ordinary residence abroad.

Section 4. Compulsory insurance upon application. (1) The following persons shall be compulsorily insured upon application:

if the compulsory insurance is applied for by an authority having its domicile within the Federal Republic of Germany. Persons who during their period of service or employment abroad are guaranteed pension expectancy, shall be regarded within the scope of retroactive insurance coverage as being subject to compulsory insurance even without making an application.

(2) Self­employed persons who are not only temporarily self­employed shall be compulsorily insured upon application, if they apply for compulsory insurance within five years after taking up self­employed activity, or after the end of the compulsory insurance because of such activity.

(3) The following persons shall be compulsorily insured upon application:

This also applies to persons who have their ordinary residence abroad.

(4) Compulsory insurance begins:

Section 5. Exemption from insurance. (1) The following persons shall be exempt from insurance:

both in this employment and in future employment to which the guarantee of accrued rights to a pension extends. Whether the prerequisites under clauses 2 and 3 of sentence 1 are fulfilled, and whether the guarantee extends to further employment, in respect of persons employed by the federal Government and by masters or other employers under the supervision of the federal Government, shall be decided by the minister concerned, and in other cases by the supreme administrative body of the Land in which the employer, society or community has its domicile.

(2) Persons shall be exempt from insurance who:

(section 8 of Book Four of the Social Code)2 during such employment or self­employment. This does not apply to persons who within the scope of vocational training are employed under the Act to provide incentives to engage in a year of voluntary welfare work, or under clauses 2 to 4 of sentence 1 of section 1, or who are making use of the opportunity to engage again by stages in a not insignificant activity (section 74 of Book Five of the Social Code).2

(3) Persons who are employed or self­employed for remuneration in the course of their regular studies at a university or technical college shall be exempt from insurance.

(4) The following shall be exempt from insurance:

Section 6. Exemption from compulsory insurance. (1) The following shall be exempt from compulsory insurance:

(2) Exemption shall be granted upon application by the insured person; in cases under clauses 2 and 3 of subsection 1, upon application by the employer.

(3) The decision to grant an exemption shall be made by the pension insurance carrier, if in the following cases:

has confirmed that the prerequisites have been fulfilled.

(4) An exemption shall begin when the prerequisites for exemption have been fulfilled, if applied for within three months; otherwise upon receipt of the application.

(5) An exemption shall be limited to current employment or self­employment. In cases under subsections 1 and 2, it shall also extend to another compulsorily insured employment if this is previously limited in time, either by its own nature or by contract, and the pension carrier guarantees the acquisition of accrued earnings­related pension rights for the period of activity.

Division 2. Voluntary insurance

Section 7. Voluntary insurance. (1) Persons who are not compulsorily insured can become voluntarily insured for periods from the end of their 16th year onwards. This applies also to German citizens who have their ordinary residence abroad.

(2) Persons who are exempt from compulsory insurance or have been exempted from compulsory insurance can become voluntarily insured only if they have completed the general qualifying period. This does not apply to persons who are exempt from compulsory insurance because of the insignificance of their employment or self­employment, or during their course of study.

(3) After the binding grant of an old­age pension, or during the period in which such a pension is drawn, voluntary insurance shall not be permitted.

Division 3. [Retroactive insurance coverage and adjustment of pension rights in the event of divorce]

Section 8. [...]


CHAPTER II. BENEFITS

Division 1. [Rehabilitation]

I. [Prerequisites for benefits]

Sections 9­12. [...]

II. Scope and location for entitlement to benefits

Sections 13­32. [Scope, location, measures, duration, computation, etc.]

Division 2. Pensions

I. Types of pension and prerequisites for entitlement to a pension

Section 33. Types of pension. (1) Pensions shall be granted for old age, for reduced earning capacity and to survivors.

(2) Old­age pensions shall be granted as:

(3) Pensions for reduced earning capacity shall be granted as:

(4) Survivor's pensions shall be granted as:

(5) Under the regulations of Chapter V, the miners' adjustment grant and widower's pension shall also be granted to spouses divorced before 1 July 1977.

Section 34. Prerequisites for entitlement to a pension and limits for additional earnings. (1) Insured persons and their survivors shall be entitled to a pension, if the minimum period of coverage (qualifying period) is fulfilled and the particular prerequisites under insurance law and personal prerequisites in each case are met.

(2) A pension for old age shall be granted before completion of the 65th year only if the additional earnings limit is not exceeded. This shall not be exceeded if remuneration or income from work from employment or self­employment in a month does not exceed the amounts specified in subsection 3; in such cases, if the limit is exceeded twice in the course of a year, in each case by an amount equivalent to the limit for additional earnings under subsection 3, it shall not be taken into account. The receipt of pre­retirement benefits shall be equal to remuneration from employment. If there is more than one employment or self­employment, they shall be counted together.

(3) The limit for additional earnings shall be:

the current pension value (section 68), multiplied by the earnings points (clauses 1 to 3 of subsection 1 of section 66) of the last calendar year before the beginning of the first old­age pension, but by at least 0.5 earnings points.

II. Prerequisites for entitlement to individual pensions

A. Old­age pensions

Section 35. Standard old­age pension. Insured persons shall be entitled to an old­age pension, if they:

Section 36. Old­age pensions for long­term insured persons. Insured persons shall be entitled to an old­age pension, if they:

Section 37. Old­age pensions for persons suffering from severe occupational and general disability. Insured persons shall be entitled to an old­age pension, if they:

Section 38. Old­age pensions on account of unemployment. Insured persons shall be entitled to an old­age pension, if they:

Section 39. Old­age pensions for women. Insured women shall be entitled to an old­age pension, if they:

Section 40. Old­age pensions for miners after long­term employment underground. Insured persons who have been employed for several years underground shall be entitled to an old­age pension, if they:

Section 41. Adjustment upwards by stages and flexibility of the age limits of 60 and 63 years

Insured person's year and month of birth

Raised by ... months

To (age)

Early pension can be taken after age ...

Year

Month

Year

Month

1941

January­April

1

60

1

60

0

May­August

2

60

2

60

0

September­December

3

60

3

60

0

1942

January­April

4

60

4

60

0

May­August

5

60

5

60

0

September­December

6

60

6

60

0

1943

January­April

7

60

7

60

0

May­August

8

60

8

60

0

September­December

9

60

9

60

0

(1) In the case of old­age pensions on account of unemployment and for women, the age limit of 60 years shall be raised, for insured persons born after 31 December 1940, as follows:

Insured person's year and month of birth

Raised by ... months

To (age)

Early pension can be taken after age ...

Year

Month

Year

Month

1944

January­April

10

60

10

60

0

May­August

11

60

11

60

0

September­December

12

61

0

60

0

1945

January­February

13

61

1

60

0

March­April

14

61

2

60

0

May­June

15

61

3

60

0

July­August

16

61

4

60

0

September­October

17

61

5

60

0

November­December

18

61

6

60

0

1946

January­February

19

61

7

60

0

March­April

20

61

8

60

0

May­June

21

61

9

60

0

July­August

22

61

10

60

0

September­October

23

61

11

60

0

November­December

24

62

0

60

0

1947

January­February

25

62

1

60

0

March­April

26

62

2

60

0

May­June

27

62

3

60

0

July­August

28

62

4

60

0

September­October

29

62

5

60

0

November­December

30

62

6

60

0

1948

January­February

31

62

7

60

0

March­April

32

62

8

60

0

May­June

33

62

9

60

0

July­August

34

62

10

60

0

September­October

35

62

11

60

0

November­December

36

63

0

60

0

1949

January­February

37

63

1

60

1

March­April

38

63

2

60

2

May­June

39

63

3

60

3

July­August

40

63

4

60

4

September­October

41

63

5

60

5

November­December

42

63

6

60

6

1950

January­February

43

63

7

60

7

March­April

44

63

8

60

8

May­June

45

63

9

60

9

July­August

46

63

10

60

10

September­October

47

63

11

60

11

November­December

48

64

0

61

0

1951

January­February

49

64

1

61

1

March­April

50

64

2

61

2

May­June

51

64

3

61

3

July­August

52

64

4

61

4

September­October

53

64

5

61

5

November­December

54

64

6

61

6

1952

January­February

55

64

7

61

7

March­April

56

64

8

61

8

May­June

57

64

9

61

9

July­August

58

64

10

61

10

September­October

59

64

11

61

11

November­December

60

65

0

62

0

 

1953 and later

60

65

0

62

0

(2)   For insured persons born after 31 December 1937, the age limit of 63 shall be raised as follows:

Insured person's year and month of birth

Raised by ... months

To (age)

Early pension can be taken after age ...

Year

Month

Year

Month

1938

January­April

1

63

1

63

0

May­August

2

63

2

63

0

September­December

3

63

3

63

0

1939

January­April

4

63

4

63

0

May­August

5

63

5

63

0

September­December

6

63

6

63

0

1940

January­April

7

63

7

63

0

May­August

8

63

8

63

0

September­December

9

63

9

63

0

1941

January­April

10

63

10

63

0

May­August

11

63

11

63

0

September­December

12

64

0

63

0

1942

January­February

13

64

1

63

0

March­April

14

64

2

63

0

May­June

15

64

3

63

0

July­August

16

64

4

63

0

September­October

17

64

5

63

0

November­December

18

64

6

63

0

1943

January­February

19

64

7

63

0

March­April

20

64

8

63

0

May­June

21

64

9

63

0

July­August

22

64

10

63

0

September­October

23

64

11

63

0

November­December

24

65

0

63

0

 

1944 and later

24

65

0

62

0

(3) As of 1 January 2013, insured persons can claim the old­age pension up to three years before the age limit raised under subsections 1 and 2. The possibility of making an early claim before 31 December 2012 shall be provided for under subsections 1 and 2.

(4) The insured person's claim to an old­age pension shall not be considered a factor which can affect the termination of an employment relationship by the employer in accordance with the Dismissal Protection Act.4 In cases of termination for urgent business reasons, a worker's claim to an old­age pension before completion of his 65th year cannot be taken into consideration as a social reason. An agreement by which an employment relationship is to end at a time when the worker is entitled to an old­age pension shall be valid only if such agreement was concluded within the last three years before such a time, or had been confirmed by the worker.

Section 42. Full and partial pensions. (1) Insured persons shall be entitled to the full amount of an old­age pension (full pension) or a partial pension.

(2) A partial pension shall consist of one­third, one­half or two­thirds of the full pension earned.

(3) Insured persons who wish to reduce their working hours because they intend to claim a partial pension can require their employer to discuss with them the possibility of making such a reduction. If the insured person makes proposals relating to his area of work, the employer must respond to these proposals.

B. Pensions for reduced earning capacity

Section 43. Occupational disability pensions. (1) Insured persons shall be entitled to a pension for occupational disability until the completion of their 65th year, if they:

(2) Insured persons suffer from occupational disability if their earning capacity is reduced through sickness or disability to less than half of that possessed by insured persons of similar training and comparable knowledge and ability who are physically, mentally and psychologically fit. The range of activities on which the insured person's earning capacity is to be judged shall include all activities which are appropriate to their strength and ability, and which can be reasonably expected of them, with due consideration for the duration and extent of their training, their previous occupation and the particular demands of the previous occupational activity. An activity shall invariably be deemed to be reasonable if the insured person has been successfully trained or retrained for it by occupational rehabilitation measures.

(3) The period of five years before the reduction of earning capacity occurred shall be extended by:

which are not periods of compulsory contribution.

(4) A period of compulsory contributions of three years shall not be required if the reduction of earning capacity is a result of circumstances under which the general qualifying period is prematurely completed.

Section 44. General disability pensions. (1) Insured persons shall be entitled to a pension for general disability until the completion of their 65th year, if they:

(2) Insured persons are generally disabled if, as a result of sickness or infirmity, they cannot engage in gainful activity with any regularity in the foreseeable future or cannot obtain remuneration or income from work which exceeds one­seventh of the monthly reference amount. A person shall not be deemed to be suffering from general disability if he engages in self­employment.

(3) Insured persons who were generally disabled before fulfilling the general qualifying period and have been generally disabled without interruption since that time, shall be entitled to a general disability pension if they have fulfilled the qualifying period of 20 years.

(4) Subsections 3 and 4 of section 43 shall be applicable.

Section 45. [Miners' pensions.]

C. Survivors' pensions

Section 46. Widows' and widowers' pensions. (1) Widows or widowers who have not remarried shall be entitled, after the death of their spouse, to a reduced widow's or widower's pension, if the insured spouse has fulfilled the general qualifying period.

(2) Widows or widowers who have not remarried shall be entitled, after the death of their spouse who has fulfilled the general qualifying period to a widow's or widower's pension at the top rate, if:

The following shall also be regarded as children:

Maintenance in a common household of a child of the pensioner or of the insured spouse shall be regarded as child raising even after the child's 18th year, if the child is unable, because of physical, mental or psychological disability, to support himself.

(3) Surviving spouses who have married again shall be entitled, under the other prerequisites of subsections 1 and 2, to a widow's or widower's pension at the reduced or top rate, if the new marriage is dissolved or declared void (widow's or widower's pension in respect of the last but one spouse).

Section 47. Pensions on account of child raising. (1) Insured persons shall be entitled to a pension on account of child raising until completion of their 65th year, if:

(2) Divorced spouses are regarded as equivalent to spouses whose marriage has been declared void or has been dissolved.

Section 48. Orphans' pensions. (1) Children shall be entitled to a half orphan's pension after the death of one parent, if:

(2) Children shall have a claim to a full orphan's pension after the death of one parent, if:

(3) The following shall also be regarded as children:

(4) The claim to a half or full orphan's pension shall continue:

(5) In cases under subclause (a) of clause 2 of subsection 4, the age limit for entitlement to an orphan's pension shall be extended, when school education or vocational training is interrupted or delayed by statutory military service, substitute civil service or service regarded as equivalent, by a period equal to the length of the statutory military service or substitute civil service.

(6) Entitlement to an orphan's pension shall not lapse because the orphan is taken in as a child.

Section 49. Pension in the event of the insured person's disappearance. If spouses, divorced spouses or parents have disappeared, they shall be regarded as deceased if there has been no news for one year that they are alive, and the circumstances are such that their death is probable. The pension insurance carrier can require an affidavit from the entitled persons that they have not received any other news that the person is alive other than the news already indicated. For the granting of a pension, the pension insurance carrier shall have the right to fix the day of death which is probable in view of the circumstances.

D. Fulfilment of qualifying period

Section 50. Qualifying periods. (1) Fulfilment of the qualifying period of five years shall be the prerequisite for a claim to:

The general qualifying period shall be regarded as fulfilled for entitlement to:

(2) Fulfilment of the qualifying period of 15 years shall be the prerequisite for entitlement to:

(3) Fulfilment of the qualifying period of 20 years shall be the prerequisite for entitlement to a pension on account of reduced earning capacity of insured persons who have not fulfilled the general qualifying period before the general disability occurred.

(4) Fulfilment of the qualifying period of 25 years shall be the prerequisite for a claim to:

(5) The fulfilment of the qualifying period of 35 years shall be the prerequisite for entitlement to:

Section 51. Periods to be credited. (1) Calendar months in which contributions were made shall be counted towards the general qualifying period and towards the qualifying periods of 15 and 20 years.

(2) Calendar months in which contributions were paid on account of employment with continuous work underground shall be counted towards the qualifying period of 25 years.

(3) All calendar months with pensionable periods shall be counted towards the qualifying period of 35 years; but considered periods shall be counted only in so far as no self­employment has been performed which is more than insignificant, or only insignificant in consideration of the total income.

(4) Calendar months with substitute periods (Book Five of the Social Code)2 shall also be counted towards the qualifying periods.

Section 52. [Fulfilment of qualifying period by adjustment of pension rights in the event of divorce.]

Section 53. Early fulfilment of qualifying period. (1) The general qualifying periods shall be fulfilled, if insured persons:

have their earning capacity reduced or are deceased. Clause 1 of sentence 1 shall apply only to insured persons who, at the time of the accident at work, were subject to compulsory insurance or who have made at least one year of compulsory contributions in the last two years before the accident. Sentences 1 and 2 apply to miners' pensions only if the insured person, before his reduced earning capacity as a miner occurred, was last insured by miners' insurance.

(2) The general qualifying period shall also be fulfilled prematurely if insured persons, before six years have elapsed since the end of a training period, have become disabled or are deceased, and in the previous two years have made at least one year of compulsory contributions.

E. Periods relating to pensions

Section 54. Definitions. (1) The following periods relate to pensions:

(2) Periods with full­value contributions are calendar months, substantiated by contributions, which are not periods with reduced contributions.

(3) Periods with reduced contributions are calendar months that both by contribution periods and by periods to be credited (Chapter V) are substantiated by an added period or substitute periods.

(4) Non­contribution periods are calendar months, substantiated by periods to be credited, by an added period or by a substitute period, if contributions have not been paid for them also.

Section 55. Contribution periods. Contribution periods are periods for which under federal German law compulsory contributions (periods of compulsory contributions) or voluntary contributions have been made. Periods of compulsory contributions are also periods for which compulsory contributions under special provisions shall be counted as paid.

Section 56. Child­raising periods. (1) Compulsory contributions shall be counted as paid for periods for raising a child in its first three years of life. A child­raising period shall be credited to a parent (clause 3 of sentence 1 of subsection 1 and clauses 2 and 3 of subsection 3, of section 56 of Book One of the Social Code),2 if:

(2) A child­raising period shall be assigned to the parent who has raised his child. If the child has been raised jointly by more than one parent, the child­raising period shall be assigned to one parent. If the parents have raised their child jointly, they can decide, by means of a declaration of agreement, for which parent this period is to be assigned. This assignment can be restricted to a part of the child­raising period. The parents' declaration of agreement shall be submitted with effect for future calendar months. The assignment can be made effective retroactively for up to two calendar months before the declaration is submitted, unless, in the case of one parent, taking these periods into consideration, a benefit has been fixed or a legally binding decision issued concerning an adjustment of pension rights in the event of divorce. With regard to the declaration, section 16 of Book One of the Social Code2 concerning submission of an application shall apply. If the parents have not submitted a declaration of agreement, the child­raising period shall be assigned to the mother. If the child has been raised by more than one parent, the child­raising period is to be assigned to the parent who has primarily raised the child, unless otherwise provided under subsection 3.

(3) Child raising shall take place within the Federal Republic of Germany if the parent raising the child is usually resident in the Federal Republic of Germany with the child. If the parent raising the child is usually resident abroad with the child, and while raising the child or immediately before the birth of the child, has compulsory contribution periods because of employment or self­employment carried out there, this child raising shall be regarded as equivalent to child raising within the Federal Republic of Germany. This shall also apply when the parents are resident together outside the Federal Republic of Germany, if the spouse of the parent raising the child has such compulsory contribution periods, or does not have them only because he or she was one of the persons specified in subsections 1 and 4 of section 5, or was exempt from compulsory insurance.

(4) Parents shall be excluded from crediting, if:

(5) The child­raising period shall begin after the month of the child's birth and end after 36 calendar months. If during this period another child is being raised by the child­raising parent, for which a child­raising period is to be credited, the child­raising period for this and every subsequent child shall be extended by the number of calendar months of simultaneous child raising.

Section 57. Considered periods. (1) The child­raising period for a child until its tenth year shall be considered a period for a parent, in so far as the prerequisites for crediting a child­raising period are also present at this time.

(2) The period of non­professional care of a person in need of care shall become a considered period, on application by the person in need of care, provided that this person:

If crediting of a considered period because of nursing is applied for after three months have passed from the time when the nursing work was first undertaken, crediting shall begin from the month when the application was made.

Section 58. Periods to be credited. (1) Periods to be credited are periods in which insured persons:

Taking part in training as preparation for an occupation (sections 40 and 40b of the Employment Promotion Act)6 shall be regarded as equivalent to attendance at school. Periods in which insured persons were subject to compulsory insurance by virtue of their receiving social benefits, shall not be periods to be credited.

(2) Periods to be credited under clauses 1 to 3 of sentence 1 of subsection 1, shall be counted only if insured employment or self­employment or insured military service or substitute civil service are interrupted thereby. Self­employment is interrupted only if it cannot be further carried out without the collaboration of the insured person.

(3) Periods to be credited for disability or rehabilitation shall be counted for insured persons who could be subject to compulsory insurance under clause 2 of sentence 1 of subsection 3 of section 4, but only after the compulsory insurance based on an application expires.

(4) Periods to be credited shall not be counted for persons in receipt of unemployment benefits, unemployment assistance or transitional allowance, if the Federal Employment Institute has paid contributions for them to an insurance or pension institution or to an insurance enterprise or to itself.

(5) Periods to be credited are not to be taken into account for the period of benefit from an old­age pension.

Section 59. Added periods. (1) Added periods are the additional time which is counted for occupational or general disability pensions or survivors' pensions, if the insured person has not yet completed his 60th year.

(2) The added period shall begin:

(3) The added period shall end at the time reached when the period up to completion of the 55th year of age, in its entirety, and one­third of the period thereafter up to completion of the 60th year of age, is added to the time specified under subsection 2.

Section 60. [Allocation of non­contribution periods to miners' pension insurance.]

Section 61. [Permanent work underground.]

Section 62. [Compensation for pensionable periods.]

III. Amount and adjustment of pension

A. Principles

Section 63. Principles. (1) The amount of a pension shall be determined primarily according to the amount of the remuneration and income from work insured by contributions during the life of the insurance.

(2) The remuneration and income for work insured by contributions in individual calendar years shall be converted into earnings points. The insurance of remuneration or income from work up to the amount of the average remuneration of one calendar year (Appendix 1) shall provide one full earnings point.

(3) Earnings points shall be counted for non­contribution periods. The amount of these earnings points shall depend on the amount of remuneration and income from work insured in the remaining period.

(4) The assurance offered by the type of pension in each case in relation to an old­age pension shall be determined by the pension type factor.

(5) In respect of a claim for an early old­age pension or deferment of an old­age pension until after the 65th year of age, advantages and disadvantages resulting from a different pension term shall be avoided by means of an age factor.

(6) The monthly amount of pension shall be obtained by multiplying the personal earnings points, calculated with due consideration for the age factor, by pension type factor and the current pension value.

(7) The current pension value shall be adjusted annually in accordance with the development of the average remuneration, taking into account changes in the burden resulting from taxes and changes in contributions to social insurance, and to the Federal Employment Institute.

B. Calculation and adjustment of pensions

Section 64. Formula for monthly pension amount. The monthly pension amount shall be obtained by multiplying together:

as they are valued at the beginning of the pension.

Section 65. Adjustment of pensions. On 1 July of each year pensions shall be adjusted by replacing the current pension value by the new current pension value.

Section 66. Personal earnings points. (1) The personal earnings points for determination of the monthly amount of pension shall be achieved by taking the sum of all earnings points for:

multiplying it by the age factor and (in the case of orphans) increasing by one increment.

(2) The basis for determination of personal earnings points shall be the earnings points of the:

(3) The basis for determination of the personal earnings points for a partial pension shall be the sum of all earnings points on which the first old­age pension is based. The monthly amount of a partial pension shall be calculated on that part of the sum of all earnings points which corresponds to the proportion of the partial pension to the full pension.

Section 67. Pension type factor. The pension type factor for personal earnings points shall be as follows:

Section 68. Current pension value. (1) The current pension value shall be the amount, up to 30 June 1992, which corresponds to an old­age pension of the workers' and salaried employees' pension insurance for December 1991, if contributions on the basis of the average remuneration have been paid for one calendar year. This value shall be altered on 1 July each year by multiplying the previous current pension value by the factors for the alteration:

(2) The factor for the alteration of the sum of the gross wages and salary of average employed workers shall be ascertained by dividing the values of these for the previous year by their value for the last year but one.

(3) The factor for the alteration of the loading shall be obtained by multiplying together the relative values:

The net earnings rate shall be the relative value of the net remuneration and the gross remuneration as average value from the national accounts. The net pension rate shall be the relative value of a disposable standard pension and the gross standard pension on which it is based (regular old­age pension from the pension insurance for workers and employees with 45 earnings points). The disposable standard pension shall be ascertained by subtracting from the gross standard pension the share of contributions to pensioners' sickness insurance and the average taxes levied on it, without regard to further income.

(4) In fixing the new current pension value, the data submitted at the beginning of a calendar year to the Federal Statistical Office shall be used as the basis for the previous calendar year, and, for the last calendar year but one, the data of the national accounts shall be used in fixing the previous current pension value.

Section 69. Power to make regulations. (1) The federal Government, with the agreement of the Senate of the federal Parliament, shall establish by decree the current pension value to have effect from 1 July in each year. This shall take place by 31 March of each year.

(2) The federal Government, with the agreement of the Senate of the federal Parliament, shall establish by decree, by the end of each year:

This is to take place by 31 December of each year.

C. Determination of personal earnings points

Section 70. Earnings points for contribution periods. (1) Earnings points shall be determined for contribution periods by dividing the contribution assessment basis by the average remuneration for the same calendar year. For the calendar year in which the pension begins and for the calendar year before, the amount determined provisionally for these calendar years shall be taken as the average remuneration.

(2) For each calendar month, child­raising periods shall be given 0.0625 earnings points, but in any case at least the earnings points determined under subsection 1.

(3) For each calendar month, periods of compulsory contribution for vocational training shall be given 0.075 earnings points, but in any case at least the earnings points determined under subsection 1. The first 48 calendar months with compulsory contributions for periods of insured employment or self­employment up to completion of the 25th year shall always be regarded as periods of compulsory contribution for vocational training. The periods to be credited for an apprenticeship set out in Chapter V shall be counted as part of the 48 months.

(4) If remuneration has been certified in advance for an old­age pension (section 194), earnings points for this pension shall be determined from this as from the contribution assessment basis. If the actual earned remuneration differs from that attested in advance, it shall be ignored for purposes of this pension.

(5) Earnings points shall be determined for periods for which contributions have been paid under the regulations of Chapter IV concerning retroactive payment of contributions, by dividing the contribution assessment basis by the average remuneration of the year in which the contributions were paid.

Section 71. Earnings points for non­contribution periods and periods with reduced contributions (overall payments valuation). (1) Non­contribution periods shall be given the average value in earnings points resulting from the total benefit in contributions during the periods suitable for coverage. Here they shall be given the higher average value from the basic valuation from all contributions or from the comparative value covering only full­value contributions.

(2) For periods with reduced contributions, the sum of earnings points shall be raised by an increment so that at least that value is attained which these periods would have as non­contribution periods after the comparative valuation. The additional earnings points shall be allocated in equal proportions to the calendar months with reduced contribution periods.

(3) For the overall payments valuation, 0.0625 earnings points shall be allocated to each calendar month considered as periods, unless the month already has a higher value as a contribution period. Considered periods in which self­employment is carried on which was more than insignificant or was only insignificant in consideration of the total income, shall be allocated earnings points only insofar as compulsory contributions have been paid for these periods.

(4) Insofar as non­contribution periods coincide with periods which, by reason of provision of pension benefits:

are pensionable, or are recognised as pensionable when the event giving rise to the pension takes place, they shall not be taken into account in the overall payments valuation.

Section 72. Basic valuation. (1) In basic valuation earnings points for each calendar month shall be taken as the basis, at the amount which is the sum of the earnings points for contribution periods and considered periods, divided by the number of months suitable for coverage.

(2) The total period suitable for coverage shall comprise the period from completion of the 16th year until:

The total period suitable for coverage shall be extended by the calendar months before completion of the 16th year in which there were pensionable periods.

(3) Calendar months with:

shall not be suitable for coverage.

(4) In respect of pensions with added periods, the number of months suitable for coverage in the total period shall in addition be reduced by an adjustment in relation to gaps in coverage in complete months; but, in the case of a survivor's pension, only if the insured person has a pensionable period within the last two years before the beginning of the added period. The adjustment in relation to the gaps in coverage shall be attained when the number of calendar months of the total period is reduced by the number of calendar months with contribution periods, considered periods and periods not suitable for coverage (gaps), and multiplied by the factor representing the number of calendar months for a non­contribution added period, proportionate to the number of calendar months from contribution periods, considered periods and periods not suitable for coverage in the total period, including the non­contribution added periods.

Section 73. Comparative valuation. In comparative valuation, earnings points shall be taken as the basis for each calendar month, at the amount which results when the sum of the earnings points from the basic valuation without earnings points for:

is divided by the number of months suitable for coverage. Here the calendar months which were left out of consideration in the comparative valuation shall be deducted with their earnings points from the months of the basic valuation which were suitable for coverage.

Section 74. Limited overall payments valuation. The value resulting from the overall payments valuation is limited, for each calendar month with periods to be credited for sickness and unemployment, to a maximum of 80 per cent, and for attendance at a school, technical college or university, to a maximum of 75 per cent (limited overall payments valuation). The limited overall payments valuation for periods to be credited for attendance at a school, technical college or university, may not exceed 0.0625 earnings points for one calendar month.

Section 75. Earnings points for periods after commencement of pension. (1) For periods after commencement of the pension to be calculated, earnings points shall be determined only for an added period.

(2) In respect of pensions for reduced earning capacity, earnings points shall not be determined:

This does not apply to:

(3) In respect of pensions for general disability, earnings points shall also be determined, on application, for contribution periods and periods to be credited after the general disability occurred, if such contribution periods amount to 20 years.

Section 76. [Increases or decreases resulting from an adjustment of pension rights in the event of divorce.]

Section 77. Age factor. (1) The age factor shall be governed by the age of the insured person when the pension begins and shall determine to what extent earnings points are to be taken into account in determining the monthly amount of pension. Earnings points shall be taken into account in full (age factor 1.0):

unless they have already been the basis of personal earnings points for an old­age pension taken up prematurely, or, after completion of the 65th year, have not yet been the basis of personal earnings points.

(2) In respect of earnings points which have not yet been the basis of personal earnings points for an old­age pension, for each calendar month for which insured persons:

(3) For the earnings points which have already been the basis of personal earnings points for an early old­age pension, the earlier age factor shall remain the standard. However, in the case of earnings points for which insured persons:

Section 78. Supplement for orphans' pensions. (1) The addition to personal earnings points in the case of orphans' pensions shall be governed by the number of calendar months with

pensionable periods and the age factor of the dead insured person; the addition for each calendar month with contribution periods shall be taken into account in its entirety. For each calendar month with other pensionable periods, the addition shall be taken into account in the proportion in which the number of calendar months with contribution periods and considered periods stands to the number of months suitable for basic valuation coverage.

(2) In the case of a half orphan's pension, 0.0833 earnings points shall be taken as the basis for fixing the addition for each calendar month.

(3) In the case of a full orphan's pension, 0.075 earnings points shall be taken as the basis for fixing the addition for each calendar month of the dead insured person with the highest pension. The personal earnings points of the dead insured person with the second highest pension are deducted from the addition.

D. Miners' pensions: special details

Sections 79­87. [Pension type factor, earnings points, etc.]

E. [Calculation of monthly pension amount in special cases]

Section 88. [...]

IV. Concurrence of pensions and income

Section 89. Multiple pension claims. (1) If a claim exists for one and the same period to more than one pension from the person's own insurance, only the highest pension shall be granted. If pensions are equally high, the following order shall be observed:

(2) A reduced widow's or widower's pension shall not be granted for the period for which there is a claim to a widow's or widower's pension at the top rate.

(3) If there is a claim to several orphans' pensions for one and the same period, only the highest orphans' pension shall be granted. If the orphans' pensions are equally high, only that pension shall be granted which is applied for first.

Section 90. [Widows' and widowers' pensions in respect of the last spouse but one and claims arising from the dissolution of the last marriage.]

Section 91. Apportionment of widows' and widowers' pensions among several entitled persons. If a claim to a widow's or widower's pension from the accrued pension rights of an insured person exists for one and the same period for several entitled persons, then each entitled person shall receive that part of the widow's or widower's pension which corresponds to the relation of the duration of his or her marriage with the insured person to the duration of the marriages of the insured person with all entitled persons. This does not apply to widows or widowers if the pension type factor of the widow's or widower's pension is at least 1.0. If it should prove, by application of the laws of another country, that there are several entitled persons, the allocation shall be carried out in accordance with subsection 2 of section 34 of Book One of the Social Code.2

Section 92. [Orphans' pensions and other benefits for orphans.]

Section 93. Pensions and benefits from accident insurance. (1) If a claim exists for one and the same period:

then the pension shall not be granted insofar as the sum of the concurrent amounts of pension (before deduction of income) exceeds the limit in each case.

(2) In determining the sum of the concurrent amounts of pension, the following shall not be taken into account:

(3) The limit amounts to 70 per cent of one­twelfth of the annual remuneration on which the calculation of the pension from the accident insurance is based, multiplied by the pension type factor in each case for personal earnings points of the workers' and employers' pension insurance; in the case of a miner's pension this factor is 0.4. The lowest limit is the monthly amount of the pension without the amounts under clause 1 of subsection 2.

(4) Subsections 1 to 3 shall also be applied:

The lump­sum settlement replaces the pension for the period for which it is fixed. In cases under clause 4 of sentence 1, the annual remuneration shall be based on 18 times the monthly amount of the pension for occupational accident or disease. If the pension is granted for a reduction of earning capacity of less than 100 per cent, the basis shall be taken as the amount of pension which would be granted for a reduction of earning capacity of 100 per cent.

(5) Subsections 1 to 4 shall not be applied if the pension from the accident insurance:

Section 94. Pensions on account of reduced earning capacity and wages or early retirement benefit. (1) Remuneration acquired over the same period shall be deducted from a pension for occupational disability or total disability, if the employment commenced before the pension began and has not been engaged in thereafter. The remuneration shall be reduced by once­paid remuneration and by statutory deductions.

(2) Pre­retirement pay, acquired over the same period and reduced by statutory deductions, which is acquired by employment which began before the pension began and was not engaged in thereafter, shall be deducted from a pension for occupational disability.

Section 95. Pensions on account of reduced earning capacity and unemployment benefits. Unemployment benefits granted over the same period shall be deducted from a pension on account of reduced earning capacity. There shall be no deduction if the unemployment benefit is granted:

Section 96. Retroactively covered persons in receipt of pension benefits. Retroactively covered persons who have lost their claim to benefit entirely and permanently shall not be granted the pension or the higher pension for the period for which maintenance payments are to be granted.

Section 97. Deduction of income from survivors' pensions. (1) The income (sections 18(a) to 18(e) of Book Four of the Social Code)2 of entitled persons which coincides with:

shall be deducted from it. This shall not apply to widows' or widowers' pensions, as long as the pension type factor is at least 1.0.

(2) Income which each month exceeds:

shall be deductible.

Non­deductible income shall be raised by 5.6 times the current pension value for each of the children of the entitled person which has a claim to an orphan's pension, or which has no such claim only because it is not the child of the deceased person. From the deductible income which remains, 40 per cent shall be deducted.

(3) For deduction of income, where there is a claim to several pensions, the following sequence shall be observed:

The deduction of income from a survivor's pension from the accident insurance takes precedence over the deduction of income from a corresponding pension in the event of death. The income to be deducted from a survivor's pension shall be reduced by the amount which has already led to a deduction of income from a survivor's pension that has precedence.

(4) If a pension on account of child raising coincides with a survivor's pension, the deduction of income from the survivor's pension shall be based on the income which results from deducting the income from the pension on account of child raising.

Section 98. [Sequence for applying the calculation regulations.]

V. Beginning, alteration and termination of pensions

Section 99. Beginning. (1) A pension from the person's own insurance shall be granted from the calendar month at the beginning of which the prerequisites for a claim to the pension are fulfilled, if the pension is applied for by the end of the third calendar month after the end of the month in which the prerequisites for a claim are fulfilled. If the application is made later, a pension from the person's own insurance shall be granted from the calendar month in which the pension is applied for.

(2) A survivor's pension shall be granted from the calendar month at the beginning of which the prerequisites for a claim to the pension are fulfilled. It shall be granted from the day of death, if a pension was not to be granted to the insured person in the month of death. A survivor's pension shall not be granted for more than 12 calendar months before the month in which the pension is applied for.

Section 100. Alteration and termination. (1) If, for factual or legal reasons, the prerequisites for the amount of a pension alter after it begins, the pension shall be granted at the new rate from the calendar month at the beginning of which the alteration comes into force.

(2) A pension higher than the partial pension previously received shall be granted from the calendar month at the beginning of which the prerequisites for a claim thereto are fulfilled, if it is applied for by the end of the third calendar month after the end of the month in which the

prerequisites for a claim were fulfilled; and in the case of a later application, from the calendar month in which it is applied for.

(3) If, for factual or legal reasons, the prerequisites for a claim lapse, payment of the pension shall cease at the beginning of the calendar month at the beginning of which the prerequisites lapsed. If a claim to a

pension lapses because the earning capacity of the entitled person has improved after a rehabilitation measure, payment of the pension shall cease only at the beginning of the fourth calendar month after the improvement of earning capacity. Payment of pension under subsection 2 shall end at the beginning of the month preceding the fourth calendar month, if at the beginning of that month, employment or self­employment is carried on which is more than insignificant or is only insignificant when total income is taken into account.

Section 101. [Beginning and alteration in special cases.]

Section 102. Time limitation and death. (1) If pensions are limited as to time, they shall cease at the end of the time­limit. This shall not exclude a previous alteration or termination of the pension for other reasons. Pensions may be limited as to time only to the end of a calendar month.

(2) Pensions for reduction of earning capacity shall be granted for a limited time, if:

unless the insured persons complete their 60th year within two years after the pension begins. This shall apply mutatis mutandis to full widows' or widowers' pensions on account of reduced earning capacity. The limitation shall last for three years at the most after the pension begins. It can be repeated, but it may not exceed a total duration of six years if there are subsequent time­limits as under clause 1 of sentence 1.

(3) Full widows' or widowers' pensions on account of child raising and pensions on account of child raising shall be limited to the end of the calendar month in which the child raising will probably come to an end. The limitation can be repeated.

(4) Orphans' pensions shall be limited to the end of the calendar month in which the claim to an orphan's pension will probably lapse. The limitation can be repeated.

(5) Pensions shall be granted up to the end of the calendar month in which the entitled persons die.

VI. Exclusion from and reduction of pensions

Section 103. Deliberate reduction of earning capacity. No claim to a pension for reduced earning capacity, to an old­age pension for persons suffering from severe, general, or occupational disability, or to a widow's or widower's pension at the top rate exists for persons who have intentionally caused the damage to health which is required for the grant of a pension.

Section 104. Reduction of earning capacity because of criminal offence. (1) Pensions for reduced earning capacity, old­age pensions for persons suffering from severe, occupational or general disability, or widows' or widowers' pensions at the top rate can be refused, either wholly or in part, if the entitled persons have incurred the damage to health which is required for the grant of a pension through an action which is found in a criminal court to be a criminal offence or wilful misdemeanour. This applies even when no criminal offence is found because of the mental state of the entitled person at the time the criminal offence was allegedly committed. Infractions of rules or instructions issued by mining authorities shall not be regarded as misdemeanours within the meaning of sentence 1.

(2) If the pension is refused it can be granted to spouses and children with a right to maintenance. The regulations of sections 48 and 49 of Book One of the Social Code2 concerning payment of the pension to third parties shall be applied mutatis mutandis.

Section 105. Causing the death of a relative. Persons who have deliberately caused a death shall have no claim to a survivor's pension that he would otherwise be entitled to as a result of such a death.

Division 3. Additional benefits

Section 106. Subsidy towards pensioners' health insurance coverage. (1) Persons in receipt of a pension who are voluntarily insured under the statutory health insurance scheme or with a private health insurance enterprise subject to German supervision, shall receive, together with

their pension, a subsidy towards health insurance expenses. This does not apply if they are at the same time compulsorily insured under the statutory health insurance scheme.

(2) The monthly subsidy shall be granted at the level of the contribution which the pension insurance carrier has to bear as the health insurance contribution for persons in receipt of a pension who are compulsorily insured under the statutory health insurance scheme. It shall be limited to half the actual expenses for health insurance. If pensioners receive several pensions, a limited subsidy shall be granted by the pension insurance carriers in proportion to the amount of the pensions. It can also be granted as one sum over and above one of these pensions.

Section 107. Lump­sum settlement on remarriage of widows and widowers. (1) Widows' or widowers' pensions shall be settled, when the persons entitled remarry for the first time, by an amount equal to 24 times the monthly amount of the pension. For determining other widows' or widowers' pensions from the same incurred pension right, it shall be presumed, until the end of the 24th calendar month after the end of the calendar month in which the remarriage took place, that a claim to a widow's or widower's pension exists.

(2) "Monthly amount" is the average of the widow's or widower's pension granted for the last 12 months. In the case of remarriage before the end of the 15th calendar month after the death of the insured person, "monthly amount" is the average amount of the widow's or widower's pension which was to be granted after the end of the third calendar month following the month in which death occurred. In the case of remarriage before the end of this calendar month, "monthly amount" is the amount of the widow's or widower's pension which would be granted for the fourth calendar month following the month in which death occurred.

Section 108. Beginning, alteration and termination of additional benefits. For current additional benefits, the regulations concerning the beginning, alteration and termination of pensions shall be applied mutatis mutandis.

Division 4. Pension information

Section 109. Pension information. (1) Insured persons who have completed their 55th year shall ex officio receive information concerning the amount of the accrued rights to which they would be entitled, as a standard old­age pension, without further pensionable periods. This information can also be communicated to younger insured persons either ex officio or upon application.

(2) Insured persons who have completed their 55th year shall also receive upon application information concerning the amount of the accrued rights to the pension to which they would be entitled in the event of reduced earning capacity or in the case of the death of members of their families. This information can also be communicated to younger insured persons upon application, if they have a justified interest in it.

(3) Insured persons shall receive upon application information concerning the amount of their accrued pension rights which falls due at the time of their marriage. This information shall also be given upon application to the spouse or divorced spouse of an insured person, if the pension insurance carrier is permitted to impart this information under subclause (b) of clause 2 of section 74 of Book Ten of the Social Code2 because the insured person has not, or has not completely, fulfilled his or her obligation to give information to his or her spouse. Information imparted under subsection 2 shall also be imparted to the insured person.

(4) Information on pensions shall be given in writing. It shall not be legally binding.

Division 5. Benefits paid to entitled persons residing abroad

Section 110. Principles. (1) Entitled persons who are resident abroad only temporarily shall receive grants for this period in the same manner as entitled persons who have their ordinary residence in the Federal Republic of Germany.

(2) Entitled persons who do not have their ordinary residence abroad shall receive these benefits, insofar as the following regulations concerning benefits to entitled persons residing abroad do not provide otherwise.

(3) The regulations of this section shall be applied only insofar as no other supranational and international law provides otherwise.

Section 111. Rehabilitation measures and subsidy towards pensioners' health insurance. (1) Entitled persons shall receive rehabilitation measures only if compulsory contributions for the calendar month in which the application is made have been paid for them, or have not been paid only because they were incapacitated for work that is insured employment or self­employment.

(2) Entitled persons shall receive no subsidy towards health insurance expenses.

Section 112. Pensions on account of reduced earning capacity. Entitled persons shall receive a pension on account of reduced earning capacity only if the claim exists independently of the current state of the labour market. In the case of a pension to be granted for occupational disability or a miners' pension, it shall also be necessary that entitled persons should already have had a claim to this pension for the period in which they still had their ordinary residence within the Federal Republic of Germany.

Section 113. Amount of pension. (1) The personal earnings points of entitled persons shall be determined from:

Contribution periods completed in the Federal Republic of Germany are contribution periods for which contributions under federal German law have been paid since 8 May 1945, together with the contribution periods regarded as equal to these in Chapter V.

(2) The increase in personal earnings points in the case of orphans' pensions for entitled persons shall be determined only from contribution periods completed in the Federal Republic of Germany.

(3) Personal earnings points of entitled persons who are not Germans are taken into account up to a maximum of 70 per cent.

Section 114. Special provisions for German citizens entitled to a pension. (1) Personal earnings points for German citizens entitled to a pension are additionally determined from:

Earnings points determined under clause 1 shall be taken into account only in the proportion in which the earning points for contribution periods completed in the Federal Republic of Germany and the earnings points determined under clause 1 of subsection 1 and sentence 2 of subsection 2 of section 272 stand in relationship to all earnings points for contribution periods including periods of employment under the Refugees' Pensions Act.

(2) The increment in personal earnings points for orphans' pensions for entitled German citizens shall in addition be determined:

Division 6. Execution

Sections 115­124. [Beginning and end of proceedings, authority to make regulations, etc.]


CHAPTER III. ORGANISATION AND DATA PROTECTION

Division 1. Organisation

I. General distribution of responsibility

Section 125. Responsibility of pension insurance carriers. The following are responsible for carrying out the duties of pension insurance:

Sections 126­152. [Responsibility for insured persons and survivors, etc.]


CHAPTER IV. FUNDING

Division 1. Principles of funding and pension insurance report

I. Allocation procedure

Section 153. Allocation procedure. (1) Expenditure on pension insurance in one calendar year shall be covered by the income of the same calendar year and, as far as necessary, by withdrawals from the fluctuation reserve.

(2) The income of the workers' and salaried employees' pension insurance shall be principally the contributions and the federal subsidy; that of the miners' pension insurance shall be principally the contributions and the resources of the federal Government for equalisation of income and expenditure.

II. Pension insurance report and Social Advisory Council

Section 154. Pension insurance report. (1) The federal Government shall issue a pension insurance report every year. The report shall contain, in particular, model accounts for the development of income and expenditure, of the fluctuation reserve and of the contribution rate, based on the latest figures of the number of insured persons and pensioners and of the income, expenditure and fluctuation reserve, together with the contribution rate necessary in each case in the next 15 calendar years. In addition, the pension insurance report shall contain a survey of the probable financial development of pension insurance in the next five calendar years, based on the current estimate of medium­term economic development. Development in the pension insurance of workers and salaried employees and in the miners' pension insurance shall be presented separately.

(2) From 1997 onwards, the report shall also state how the raising of the age limit, beginning in 2001, will probably affect the labour market situation, the financial situation of pension insurance and other budgets of public authorities.

(3) Beginning in 1997 and once thereafter in each legislative period of the Federal German Parliament, the pension insurance report shall be supplemented by a report which shall describe, inter alia:

(3a)Until the equalisation of the wages and salary situation in the joined territory with the situation in the Federal Republic of Germany excluding the joined territory, the report shall also describe the development of pensions in the joined territory.

(4) The pensions insurance report shall be forwarded to the legislative bodies by 31 July of each year.

Section 155. Duty of the Social Advisory Council. (1) The Social Advisory Council shall have the duty in particular to submit its expert opinion on the pension insurance report of the federal Government.

(2) The expert opinion of the Social Advisory Council shall be forwarded to the legislative bodies, together with the pension insurance report, by 31 July of each year.

Section 156. Composition of the Social Advisory Council. (1) The Social Advisory Council shall consist of:

Its affairs shall be administered by the Federal Minister for Labour and Social Order.

(2) The federal Government shall appoint members of the Social Advisory Council for four years. One representative each of the insured persons and the employers shall be proposed by:

(3) The persons proposed must meet the conditions for membership in a body of self­government (section 51 of Book Four of the Social Code).2 Before the representatives of the economic and social sciences are appointed, the Standing Conference of German University Chancellors shall be consulted.

Division 2. Contributions and procedures

I. Contributions

A. General

Section 157. Principles. Contributions shall be levied according to a percentage rate (contribution rate) of the contribution assessment base, which shall be taken into account only up to the upper contributions limit in each case.

Section 158. Contribution rates. (1) The contribution rate for workers' and salaried employees' pension insurance shall be fixed in such a way that the probable income from contributions, taking account of the probable development of the sum of the gross wages and salaries of each average employed worker and the number of persons compulsorily insured, together with the federal subsidy and other income, taking account of withdrawals from the fluctuation reserve, are sufficient to cover the probable expenditure for the calendar year following the assessment, and to guarantee that the liquid assets of the fluctuation reserve at the end of this calendar year correspond to the amount of the average expenditure for one calendar month, at personal expense, of the workers' and salaried employees' pension insurance carriers. The contribution rate shall be rounded up to one place of decimals. "Expenditure at personal expense" shall be all expenditure after deduction of the federal subsidy, reimbursements and adjustments.

(2) The contribution rate for miners' pension insurance shall be altered in each case in the proportion in which it is altered in the pension insurance of workers and employees. The contribution rate shall be rounded up to one place of decimals only for the specific calendar year.

Section 159. Upper earnings limit. The upper earnings limit for the pension insurance of workers' and salaried employees' pension insurance, as well as for miners' pension insurance, shall be altered on 1 January every year in the proportion in which the sum of the gross wages and salaries of each average employed worker in the previous year stands in relation to the corresponding sum of the gross wages and salaries in the year before the previous year. The altered amounts shall be rounded up to the next highest multiple of 1200 only for the calendar year for which the upper earnings limit is fixed.

Section 160. Power to make regulations. The federal Government, with the agreement of the Senate of the federal Parliament, for the period from 1 January of the following year shall fix by statutory regulation:

The fixation shall be completed by 30 September.

B. Contribution assessment bases

Section 161. Principles. (1) The contribution assessment basis for compulsorily insured persons shall be the income subject to compulsory contributions.

(2) The contribution assessment basis for persons insured voluntarily shall be every amount between the lowest basis for contribution assessment (section 167) and the upper earnings limit.

Section 162. Employed persons' income which is subject to compulsory contributions. Income subject to compulsory contributions shall be in respect of:

Section 163. Special regulations for the income of employed persons which is subject to compulsory contributions. (1) In respect of persons employed irregularly, the income subject to compulsory contributions shall be taken as the remuneration obtained within one calendar month up to the amount of the monthly upper earnings limit, regardless of the duration of the employment. Employment shall be "irregular" if it is usually limited to less than one week either by the nature of the work or in advance by the contract of employment. If more than one irregular employment occurs within one calendar month, and the total remuneration exceeds the upper earnings limit, then in calculating the contributions the individual payments shall be taken into account proportionally only insofar as the total amount does not exceed the monthly upper earnings limit. Insofar as insured persons or employers apply for this, the competent collection body shall divide the contributions in accordance with the remuneration from irregular employment to be taken into account.

(2) In respect of employed seamen, income subject to compulsory contributions shall be the officially established average monthly remuneration (section 842 of the Federal Insurance Code)7 for the individual classes of ships' crews and types of vessel. The income subject to compulsory contributions, for seamen who are provided with meals on board ship, shall be raised by the average meals allowance as officially determined. If an average monthly remuneration has not been officially determined, the income subject to compulsory contributions shall be determined by the standing regulations of the Maritime Health Insurance Fund as the responsible collection body. The regulations for one­time payment of remuneration shall not be applicable. Subsection (b) of section 1152 of the Federal Insurance Code7 shall apply mutatis mutandis.

(3) In respect of workers who are working in an honorary capacity and whose remuneration is reduced as a result of this honorary employment, the amount between the remuneration actually obtained and the remuneration which would have been obtained without the honorary employment shall be decisive, but only up to the upper earnings limit as remuneration (differential amount) if the worker applies to his employer for this. The above applies only to honorary employment for corporations, institutions or foundations under the public law and their associations, including central associations, or their joint associations, parties and trade unions, as well as corporations, associations of individuals and foundations, which are exempt from corporate tax on the grounds of their exclusive and direct work for non­profit­making, charitable or religious purposes. The application can only be made for current periods for which wages and salary are paid.

(4) In respect of insured persons who engage in honorary employment which is subject to contributions and who have paid voluntary contributions for the foregoing calendar year, each amount between the remuneration and the upper earnings limit counts as remuneration (differential amount) if the insured persons apply to their employer for this. Sentence 1 shall apply only to honorary employment, subject to contributions, for public law corporations. The application can be made only for current and future wage and salary payment periods.

Section 164. One­time payment of remuneration for work regarded as income subject to compulsory contributions. (1) "One­time remuneration" means payments which are to be counted towards remuneration for work and which are not paid for work in a single remuneration accounting period. One­time remuneration to employed persons shall be assigned to the remuneration payment period in which it is paid, unless otherwise provided under subsections 2 and 4.

(2) One­time remuneration which is paid after termination or suspension of an employment relationship shall be assigned to the last remuneration payment period of the current calendar year, even when this is not documented by remuneration.

(3) The one­time remuneration shall be taken into account when fixing the remuneration for employed persons which is subject to compulsory contributions, insofar as remuneration subject to compulsory contributions which has already been paid does not attain the proportional upper earnings limit. The proportional upper earnings limit is that part of the upper earnings limit which corresponds to the duration of all employment relationships with the same employer in the current calendar year, up to the end of the remuneration payment period to which one­time

remuneration is to be assigned. Periods which are not documented with contributions from current (not one­time) remuneration shall be excluded.

(4) One­time remuneration paid in the period from 1 January to 31 March shall be assigned to the last remuneration payment period of the foregoing calendar year, if it is paid by the employer for this remuneration payment period and, together with other remuneration subject to compulsory contributions which has been fixed for the current calendar year, exceeds the proportional upper earnings limit under sentence 2 of subsection 3. Sentence 1 does not apply to one­time remuneration after 31 March which, under subsection 2, is to be assigned to a remuneration payment period occurring within the period from 1 January to 31 March.

(5) If the employed person is subject to compulsory statutory health insurance, the annual earnings limit of the statutory health insurance (clause 1 of subsection 1 of sentence 6 of Book Five of the Social Code)2 shall be authoritative for the application of subsection 4.

Section 165. Self­employed persons' income subject to compulsory contributions. (1) Income subject to compulsory contribution shall be:

In the case of self­employed persons, and contrary to clause 1 of sentence 1, until three years after the year of taking up self­employment, "income subject to contributions" shall be earned income at the amount of 50 per cent of the reference amount, if the insured persons apply for this to the pensions insurance carrier.

(2) For homeworkers working in an honorary capacity the Regulation for Workers Working in an Honorary Capacity shall apply mutatis mutandis.

Section 166. Income of other insured persons subject to compulsory contributions. Income subject to compulsory contributions is:

Section 167. Persons voluntarily insured. The minimum contribution assessment basis for persons voluntarily insured shall be one­seventh of the reference amount.

C. Assignment of responsibility for contribution payments

Section 168. Responsibility for contributions in respect of employed persons (1) Contributions shall be borne:

(2) If as a result of one­time remuneration the limit specified in clause 1 of subsection 1, or the limit specified in clause 2 of subsection 1, of 20 per cent of the monthly reference amount is exceeded, the insured persons and the employer shall each bear half of the contributions of that part of the remuneration which exceeds these limits; otherwise the employers alone shall bear the contribution.

(3) Persons who are insured under miners' pension insurance shall bear contributions up to the percentage rate which they would have to bear if they were insured under the workers' and salaried employees' pension insurance; otherwise the employers shall bear the contributions. For miners' pension insurance, instead of the sum of 610 German marks mentioned in clause 1 of subsection 1, the sum of 750 German marks shall be determinative.

Section 169. Responsibility for contributions in respect of self­employed persons. Contributions shall be borne:

Section 170. [Responsibility for contributions in respect of other insured persons.]

Section 171. Persons voluntarily insured. Persons voluntarily insured shall themselves be responsible for their contributions.

Section 172. Employer's share in cases of insurance exemption. (1) In respect of employed persons who are exempt from insurance:

the employers shall bear half the contribution which would be payable if the employed persons were subject to insurance. In the miners' pension insurance, instead of half the contribution, that part of the contribution for which employers are responsible shall be paid. For that part of the contribution, the regulations in Division 3 and the regulations concerning fines under clauses 2 to 4 of subsections 1 and 4 of section 111 of Book Four of the Social Code2 shall apply, mutatis mutandis.

(2) In respect of employed persons who are exempt from insurance under clause 1 of subsection 1 of section 6, the employers shall bear half the contribution to an occupational insurance scheme, but at the most up to half the contributions payable if the employed persons were not exempted from insurance.

D. Payment of contributions

Sections 173­178. [Principles, contributions by artists, journalists, social security benefit recipients, etc.]

E. Refunds

Sections 179­180. [Refund of expenses, regulations.]

F. Retroactive insurance coverage

Sections 181­186. [Responsibility for contributions, due dates, etc.]

G. Adjustment of pension rights in the event of divorce

Sections 187­188. [Payment of contributions, regulations.]

H. Basis for calculation

Section 189. [Calculation basis.]

II. Procedures

A. Registration

Sections 190­195. [Registration for various circumstances, regulations.]

B. Duty to notify and provide information

Section 196. [Duty to notify and provide information.]

C. Validity of payment of contributions

Sections 197­202. [Time­limits interruption, payment presumption, etc.]

Section 203. Substantiation of payment of contributions. (1) If insured persons prove that they have carried out for remuneration employment subject to compulsory insurance and that corresponding contributions have been paid for this employment, the period of employment shall be recognised as a contribution period.

(2) If insured persons prove that the share of the contribution for which they are responsible has been deducted from their remuneration, the contribution shall be considered as paid.

D. Retroactive payment of contributions

Section 204. Retroactive payment of contributions upon leaving an international organisation. (1) German citizens who leave the service of an international or supranational organisation can upon application pay voluntary contributions retroactively for the periods of this service, if:

If retroactive payment of voluntary contributions is applied for periods which are already documented by voluntary contributions, the contributions which have already been paid shall be refunded.

(2) The application can be made only within six months after leaving the service of the organisation. If retroactive payment within this time­limit is excluded because of a lifelong provision of pension benefits, or expectancy of a lifelong provision of pension benefits in the event of old­age and of survivors' pension benefits is guaranteed by a legal person under public law, the application, in the case of retroactive insurance coverage because of leaving employment not subject to insurance, may be made within six months after the retroactive insurance coverage is effected. The time­limit for this application shall end at the earliest on 31 December 1992. Fulfilment of the prerequisites for the grant of a pension within the time­limit does not prevent retroactive payment. The contributions shall be paid retroactively not later than six months after the commitment effect of the ruling on retroactive payment comes into force.

Sections 205­209. [Retroactive payment when criminal prosecution, clergy, training periods, agricultural employers, etc.]

E. Refund and supervision of contributions

Section 210. Refund of contributions. (1) Contributions shall be refunded upon application:

(2) Contributions shall be refunded only if six months have elapsed since becoming no longer subject to compulsory insurance, and no new obligation to be insured has arisen. The limitation period in section 45 of Book One of the Social Code2 shall not be applicable.

(3) Contributions shall be refunded in the amount at which the insured persons have been responsible for their payment. If a net remuneration is agreed upon, the workers' part of the contribution borne by the employers shall be refunded. In respect of contributions arising from self­employment or voluntary contributions, one­half shall be refunded. Contributions to insurance at a higher rate shall be refunded in full. Only those contributions shall be refunded which were paid within the territory of the Federal Republic of Germany for periods after 20 June 1948, in Berlin for periods after 24 June 1948 and in the Saarland for periods after 19 November 1947. Contributions which were paid within the joined territory shall be refunded only in respect of periods after 30 June 1990.

(4) If an adjustment of pension rights in the event of divorce has been carried out either for the benefit of the insured person or at his or her expense, the amount to be refunded shall be increased or reduced by half the amount which, when the decision of the Family Court became final, would have been payable as the contribution for the supplement or for the deduction still existing at the time of refund of the contribution.

(5) If insured persons have claimed a benefit from the insurance, in cash or in kind, only the contributions paid later shall be refunded.

(6) The application for refund under subsection 1 cannot be restricted to single periods of contribution or parts of contributions. Refunding shall dissolve the insurance relationship which existed up to that time. Claims from completed pensionable periods up to the date of refund shall no longer be valid.

Sections 211­212. [Responsibility for contributions paid in error, supervision of contributions.]

Division 3. Federal participation, financial relations and refunds

I. Federal participation

Section 213. Federal subsidy. (1) The federal Government shall grant subsidies towards the expenses of the workers' and salaried employees' pension insurance.

(2) The subsidy of the federal Government towards the expenses of the pension insurance of the workers (federal subsidy) and the subsidy of the federal Government towards the expenses of the pension insurance of salaried employees (federal subsidy), shall be altered in each calendar year in the proportion in which the sum of the gross wages and salary of each averagely employed worker in the foregoing calendar year stands in relation to the corresponding sum of the gross wages and salary in the last calendar year but one. In the event of alterations of the contribution rate, the federal subsidy shall, in addition, be altered in the proportion in which the contribution rate of the year for which it is fixed stands in relation to the contribution rate of the year before.

Section 214. Liquidity assurance. (1) If the liquid assets of the fluctuation reserve in the pension insurance of workers and salaried employees are not sufficient to fulfil the obligations of payment, the federal Government shall grant the workers' and salaried employees' pension insurance carriers liquidity assistance up to the amount of the sums needed (federal guarantee).

(2) The funds made available as liquidity assistance by the federal Government shall be repaid as soon as and insofar as they are no longer needed to fulfil payment obligations for the current calendar year, and at the latest by 31 December of the year following that in which they were made available. Interest shall not be payable.

Section 215. Federal participation in miners' pension insurance. In respect of miners' pension insurance, the federal Government shall be responsible for the difference between income and expenditure of a calendar year, and by doing so shall ensure the long­term ability to pay of miners' pension insurance.

II. Fluctuation reserve and revenue equalisation

Section 216. Fluctuation reserve. Workers' and salaried employees' pension insurance funds shall have a fluctuation reserve (operating funds and reserves) to which the surplus from income over expenditure shall be added and from which deficiencies shall be covered. The adminstrative assets shall not form part of the fluctuation reserve.

Section 217. Investment of fluctuation reserve. The fluctuation reserve shall be placed in liquid investments. "Liquid" means all investments with a term, a period of notice or a remaining term of up to 12 months; but, in the case of investments with a period of notice, only when besides an appropriate rate of interest a return flow is guaranteed at least equivalent to the sum invested. If there is no guarantee of a return flow at least equivalent to the sum invested, investments with a period of notice of up to 12 months shall be regarded as liquid if the difference is at least made up by a correspondingly high interest rate.

Sections 218­227. [Revenue equalisation, special expenses, refunds, expense settlement, etc.]


CHAPTER V. SPECIAL REGULATIONS

Section 228. Principles. The regulations of this Chapter shall supplement the regulations in the foregoing chapters concerning matters which could not take place as from the time when the regulations in the previous chapters came into force.

Sections 229­319. [Transitional provisions concerning adjustment to the new pension scheme, including provisions relating to persons in the newly joined Länder who were formerly insured under the German Democratic Republic social security system.]


[CHAPTER VI. PENALTIES]

Section 320. [...]


1 Act on the reform of the Pension Act, as amended by the Act to establish legal unity in statutory pension and accident insurance, of 25 July 1991 (Bundesgesetzblatt, 31 July 1991, Part I, No. 46, pp. 21­84). This Act now comprises Book Six of the Social Code, previously published in the Legislative Series, 1980 ­ Ger. F.R.2.



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