Earning Pension Benefits from International Work
Contemplating a stint abroad? It's widely popular among workers to work abroad for a while. You might be surprised to learn that your pension eligibility and potentially even its value could be positively impacted by this decision. Here's what you should know:
If you've spent some time working overseas, make sure to inform your retirement insurance provider. This step could significantly boost your future retirement benefit claims. The German Pension Insurance (DRV) strongly suggests taking this action.
To become eligible for a retirement pension from the mandatory pension insurance in Germany, a specific minimum period covered by insurance must be demonstrated. For long-term insured individuals in Germany, this period is 35 years. However, this requirement is not limited to years spent in Germany. Rather, it includes years spent overseas as well.
The duration of these periods is calculated based on the European community law between EU countries, Liechtenstein, Iceland, Norway, and Switzerland. Germany also maintains social security agreements with several other countries like Tunisia, Turkey, the USA, and Australia. Consequently, the years you've worked in these countries also contribute to your retirement benefit certification.
Receiving Retirement Benefits from Multiple Nations
Typically, each country distributes pension benefits based on the requirements met and the corresponding years contributed. Therefore, it's possible to receive pension payments from various nations simultaneously. If you meet the requirements in Germany and abroad, you can collect retirement benefits from both countries concurrently. However, if you do not meet the minimum insurance period despite the cumulative periods, and thus fail to receive a retirement benefit, you can usually claim back the paid contributions.
For detailed information, consult the free brochures "Living and Working in Europe" and "Work and Pension in Germany and in Non-Contractual Countries." Both are available for download on the website . The DRV offers a free telephone consultation at 0800-10004800.
After working overseas for an extended period, consider informing your retirement insurance provider to potentially improve your future retirement benefit claims. Given that retirement benefits can be received from various nations, meeting the requirements in both Germany and another country could allow you to receive retirement benefits from both countries simultaneously.
Extra Insights
According to German law and social security agreements with other countries, foreign employment can influence pension eligibility and benefits in several ways:
Eligibility for German Pension
- Contribution Period: To be eligible for a German pension, you must have contributed at least five years to the state pension fund. If you haven’t, you can voluntarily contribute an extra amount to the pension fund to compensate for the missed period[1].
- Residency: If you permanently move to a country outside the European Union or a country with which Germany has no social security agreement, there may be restrictions on your pension. In such cases, it is advisable to seek advice from a German pension insurance advice center to ensure that your pension is credited to your new account on time[1].
Pension Benefits Abroad
- European Union Countries: If you permanently move to a country within the European Union, Iceland, Liechtenstein, Norway, or Switzerland, you will receive the full pension[1].
- Non-EU Countries: If you permanently move to a non-EU country or a country with which Germany has no social security agreement, your pension benefits may be restricted. You should inform Deutsche Post AG’s pension service of your move in a timely manner to ensure that your pension is credited correctly[1].
Additional Considerations
- Social Security Agreements: Germany has social security agreements with various countries, which can affect how pensions are handled. For example, if you move to a country with which Germany has a social security agreement, your pension benefits might be more straightforward[1].
- Tax Implications: The tax treatment of pensions can differ depending on the country you reside in. Some countries, like Germany, do not tax U.S. Social Security benefits, making it an attractive destination for expats looking to maximize their retirement income[3].
In summary, foreign employment can affect pension eligibility and benefits under German law through the contribution period and residency requirements. The specific rules and restrictions vary depending on the country you move to and any existing social security agreements between Germany and that country.
