Occupational pension scheme: Old collective agreement can exclude employer contribution

In 2024, the BAG had already decided that a collective agreement from the time before the statutory provision of Art. 1a (1a) of the German Company Pension Improvement Act (BetrAVG) came into force can deviate from the employer contribution provided for therein. With its current decision, the BAG has now established a settled case law.

Employer’s legal obligation

Since January 1, 2018, Art. 1a (1a) and 23 (2) BetrAVG provide for the following obligation: in the event of deferred compensation in favor of a funded company pension scheme, the employer is generally obliged to pay 15 % of the deferred salary as an additional employer contribution to the company pension scheme, provided the employer saves social security contributions due to such contribution. In accordance with Art. 19 (1) BetrAVG, collective agreements may deviate from this regulation.

However, it was questionable whether this also applies to collective agreements that were concluded before January 1, 2018 and did not provide for employee participation.

“Old” collective agreement may deviate from BetrAVG without explicit regulation of the contribution

In its decision of March 11, 2025, the BAG stated that a collective agreement, even if it was concluded before January 1, 2018, can deviate from the statutory regulation on deferred compensation. It was not necessary for a collective agreement to expressly exclude the entitlement to an employer contribution or to provide for compensation for the 15 percent contribution. This followed from the interpretation of Art. 19 (1) BetrAVG.

The BAG had already rendered a similar decision in 2024, although the collective agreement in question had itself provided for an employer contribution. With the current decision and the decisions in the parallel proceedings - 3 AZR 10/25 and 3 AZR 75/24 - the BAG confirmed its previous case law that an “old” collective agreement can deviate from the statutory regulation on deferred compensation and an employer contribution, even if the collective agreement does not provide for an employer contribution at all.

Consequences for companies: Check collective agreements and adjust occupational pension schemes

With this decision, the BAG confirms its previous stance: collective agreements, even if they were concluded before 2018 and do not provide for an employer contribution, can effectively deviate from the statutory contribution obligation. Employers should therefore carefully review existing collective agreements before making contributions – also in order to avoid double charges.

We will be happy to advise you on company pension schemes and check with you whether and to what extent employer contributions are legally required – especially in conjunction with older collective agreements. Feel free to contact us.

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