Many factors go into calculating the pension. But the most important thing are the so-called pay points.
The German Pension system is dynamic and oriented towards wage development. This can be seen, among other things, in the central role that salary points play in the pension calculation.
What are pay points?
The values of the pay points are determined every year. They are based on the average income of all insured persons in the corresponding calendar year.
To determine the salary points earned personally in a calendar year, your own insured salary is compared to the average salary of all employees. If your personal annual salary corresponds to the average salary of all employees, you receive exactly one salary point.
Anyone who had an annual income (provisionally estimated average salary) of 41,541 euros (West Germany) or 39,338 euros (East Germany) in 2021 will have exactly one salary point added to the points they have accumulated in the past. One earnings point currently entitles you to receive a monthly pension of 34.19 euros in the western German states and 33.47 euros in the eastern German states.
If your gross earnings are higher or lower, you will receive more or fewer earnings points accordingly. With a West salary of 20,770.50 euros, you only receive half a salary point and therefore 17.10 euros in West pension.
Extrapolation not so easy!
Anyone who thinks that they only have to multiply their earnings points for the current year by their years of work to calculate their future pension is wrong.
Anyone who reaches one salary point in 2021 and works for 35 years in their career might think that with the simple calculation of 35 years x 1 salary point x 34.19 euros (for a West German) they will get a pension of 1,196.65 euros. In fact, it’s not quite that simple.
On the one hand, the values of the salary points are different every year, and on the other hand, there are other factors to take into account. For example, deductions apply if you take out your pension early. On the other hand, under certain conditions, non-contributory years can also be taken into account, such as school education with a vocational nature, times in which you received sickness benefit or unemployment benefit I, but also periods of pregnancy and maternity protection.
Editorial team finanzen.net
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