The Riester system only supports those who provide their own savings. A distinction must be made between the so-called minimum personal contribution and the total savings contribution.
Determination of the total savings contribution
In order to receive the allowances in full, the savings contribution per year must be four percent of the previous year's gross income subject to pension insurance – a maximum of 2,100.00 euros per year and at least 60.00 euros (base amount) per year.
Determination of the minimum personal contribution
The allowances are deducted from the total savings contribution determined. The allowances are only available in full if the minimum personal contribution determined in this way is saved. If the limit is not met, the allowance will be reduced in proportion to the contribution actually paid. An example:
|
At least |
Maximum |
|
|---|---|---|
| Total savings 4% of 35,000.00 euros |
1,400.00 euros |
2,100.00 euros |
| ./. Basic allowance |
175.00 euros |
175.00 euros |
| ./. Child allowance2 |
0.00 euros |
0.00 euros |
| = own contribution3 |
1,225.00 euros |
1,925.00 euros |
1.) Single with gross income subject to pension insurance in the previous year of 35,000.00 euros
2.) Depending on the child entitled to child benefit, depending on the year of birth of the child: 185.00 euros for births before 2008 or 300.00 euros for births after 2008
3.) Note: Possible tax savings through deducting special expenses are not taken into account in this example calculation.
The law does not provide for any allowances for those directly entitled to funding without a minimum contribution. Therefore, everyone whose own contribution is below the basic amount of 60.00 euros per year due to the deduction of allowances must save at least this 60.00 euros.
Example: The previous year's gross income subject to pension insurance is 10,000 euros. Four percent of this is 400.00 euros. In addition to the basic allowance of 175.00 euros, child allowances for two children born before 2008 are added: 185.00 euros each. In total, you are entitled to 545.00 euros in allowances. In this case, the allowances are higher than the total savings contribution determined. Due to the rule “no funding without your own contribution”, you have to save 60.00 euros as your own funds in order to realize your entitlement to allowances.
If family, work or income circumstances change, the minimum contribution saved may become too low, resulting in reduced allowances.
At the end of the respective contribution year, check whether your current personal contribution for the following year is sufficient to receive the allowances to which you are entitled in full! If not, adjust your own contribution accordingly. The amount of gross annual income subject to pension insurance can usually be found in the payroll for the month of December.
