Why Only Half of German Workers Have an Occupational Pension—And How New Rules Aim to Fix That
01.07.2026 - 02:11:01 | boerse-global.de
Germany’s system of employer-sponsored retirement savings reaches just 51.9 percent of employees in social security–covered jobs—a figure that pales beside the near-universal coverage in Sweden and the Netherlands, where about nine out of ten workers are enrolled. The gap has prompted a fresh wave of reforms, even as structural hurdles and a shrinking collective bargaining landscape continue to hold back broader uptake.
Collective Bargaining Is the Missing Ingredient
At the root of the disparity lies the rate of tariff binding—the share of workers covered by collective agreements. In Sweden it stands at 88 percent, in the Netherlands at 90 percent. Germany, by contrast, saw its tariff binding rate drop to an estimated 49 percent in 2025. That decline directly correlates with the low adoption of occupational pensions, known as bAV, because collectively bargained agreements often include automatic enrolment or employer-funded contributions. In the Netherlands, companies pay two-thirds of the premium for workplace pensions; employees cover the remaining third.
Rent expert Alexander Siegmund points to additional complications inside the German system. Five different routes to set up an occupational pension, a tangle of stakeholder interests, and lingering employer liability make the process burdensome—especially for small firms. The inequality by company size is stark: in businesses with more than 1,000 workers, 86 percent have access to a bAV; in micro-enterprises with fewer than ten employees, the rate plummets to roughly 25 percent.
New Legislation and a 2028 Target
To address these shortcomings, the government enacted the BRSG II, which took effect on January 22, 2026. It expands an opt?out model designed to boost enrolment by default. Separately, the Rentenkommission (pension commission) has recommended a stepped-up dialogue between employer associations and unions this year to strengthen the role of occupational pensions.
Looking ahead, the commission plans to introduce a fully funded supplementary pension from 2028. It would start with a contribution of 0.5 percent of gross wages and gradually rise to 2 percent. Other proposals on the table include linking the retirement age to life expectancy and extending mandatory pension insurance to self?employed workers and mini?jobbers.
Wider Pension Picture: Germany Trails the EU
The limited reach of workplace pensions is part of a broader problem. Germany’s general replacement rate—the percentage of pre?retirement income that the statutory pension provides—stood at 47.8 percent in 2023, far below the European Union average of 66.7 percent. Austria comes in at 87 percent, Spain at 86 percent.
Sweden operates a three?pillar model: an earnings?related state pension, a premium reserve component, and a mandatory occupational scheme. The total contribution there is 18.5 percent of earnings—11 percent paid by employers and 7.5 percent by workers. In Germany, non?insurance benefits (so?called versicherungsfremde Leistungen) weigh on the system. Experts estimate these costs at 124 billion euros annually, against a federal subsidy of 84 billion euros, leaving a considerable funding gap.
