German state subsidies in form of tax incentives for company pension schemes have nearly doubled year-on-year in 2020 to €175.5m compared with €89.1m in 2019, according to figures released by the Federal Statistical Office (Destatis) last week.
In total 82,100 employers made use of state subsidies for over one million employees with low gross wages in the third year after the introduction of the measure through a law that reinforces occupational pensions – Betriebsrentenstärkungsgesetz (BRSG).
The subsidy amounts to 30% of the contribution that the employer pays in addition to wages as a company pension to Pensionsfonds, Pensionskassen or direct insurance polocies, the Federal Statistical Office explained with a note on the method used to elaborate the figures.
This is the result of the assessment of statistics on income taxes of German employers. The number of employers claiming subsidies rose from 3.4% in 2019 to 4.2% last year, according to the figures.
On average, each employee saw subsidies for company pensions of €171, compared with €120 in 2019. The monthly income threshold to receive the subsidy increased from €2,200 in 2019 to €2,575 in 2020 with the law on basic pensions.
The maximum annual amount of funding for employees doubled from €144 to €288.
According to the Statistical Office, state fundings for company pensions have grown in particular for large firms with over 250 employees. In large companies, the amount of state subsidies rose by €60.2m last year to €120.6m, and each employee saw on average €190 in subsidies for company pensions, up from €131 in 2019.
In small and medium-sized firms, with a number of employees between 51 and 251, the amount of subsidies in 2020 grew to €33.4m from €17.1m in 2019. The average subsidy for employees rose from €120 in 2019 to €174 last year.
Small companies with 11-50 employees lag behind, with subsides for company pension schemes reaching €14.3m last year, up from €7.6m in 2019. The average subsidy for each employee stood at €115 last year from €89 the prior year.