Anyone who was employed in the German public sector and leaves Germany usually takes a second entitlement with them in addition to the statutory pension: the occupational pension from the supplementary pension scheme (Zusatzversorgung). The public sector supplementary pension raises its own questions when emigrating. Is the entitlement preserved if the qualifying period has not yet been completed? Can contributions be paid out? Will the VBL or the municipal fund transfer the pension to any country? And which state taxes the benefit? This article is based on the Statutes of the Pension Institution of the Federal Government and the Federal States (Satzung der Versorgungsanstalt des Bundes und der Länder, VBLS) as amended by the 35th amendment to the Statutes (as at May 2026), the Occupational Pensions Act and the Income Tax Act. The statutory pension itself is covered in the article on Pension insurance when emigrating.
Legal Basis: Collective Agreement, Statutes, Supplementary Pension Fund
The supplementary pension is a form of occupational retirement provision that is rooted not in statute but in collective bargaining law. Under Section 25 TVöD and Section 25 TV-L, employees covered by collective agreements are entitled to a pension under the Collective Agreement on Old-Age Provision (Altersvorsorge-Tarifvertrag, ATV) or the municipal ATV-K. The two collective agreements are almost identical. The major churches have their own rules, which largely follow the ATV.
The pension is administered by supplementary pension funds (Zusatzversorgungskassen). The largest is the VBL in Karlsruhe; in addition, there are numerous municipal and church funds, which are organised in the Association of Municipal and Church Pension Funds (Arbeitsgemeinschaft kommunale und kirchliche Altersversorgung, AKA). The statutes of the relevant fund are decisive for your rights. Benefit law has been largely harmonised, but details such as section numbers, forms and administrative practice may differ. The following references to the statutes relate to the VBL; anyone insured with a municipal or church fund should look up the corresponding rule in that fund’s statutes.
Since 2002, the points model has applied: for each year of compulsory insurance, pension points (Versorgungspunkte) are credited, which are multiplied at the start of the pension by a reference amount of four euros (Section 35 (1) VBLS). Older entitlements were converted into points as starting credits (Startgutschriften). Funding differs: partly pay-as-you-go via levies (Umlage), partly funded, partly mixed. As shown below, this affects taxation.
Special Position under the Occupational Pensions Act
The Occupational Pensions Act (Betriebsrentengesetz, BetrAVG) applies to the supplementary pension only to a limited extent. Under Section 18 (1) BetrAVG, for persons insured with the VBL and with the municipal and church supplementary pension institutions, Section 2 BetrAVG (amount of the vested entitlement), among others, does not apply, and only parts of the settlement rules in Section 3 BetrAVG apply; the general prohibition on settlement in Section 3 (1) BetrAVG remains in place. The transfer rules in Section 4 BetrAVG do not apply if the entitlement is wholly or partly funded by levies or from the budget, which is regularly the case for compulsory insurance. What happens when moving abroad therefore depends primarily on the fund’s statutes, not on accounts of occupational pensions in the private sector.
What Happens to the Insurance on Leaving
If the employment relationship ends, for example because you emigrate, compulsory insurance also ends. If there is no pension entitlement at that point, the insurance continues as non-contributory insurance (beitragsfreie Versicherung) (Section 30 (1) VBLS). The pension points earned are therefore not lost simply because you leave Germany. Residence abroad is not a ground for excluding the continuation of the entitlement.
Non-contributory insurance only ends when a pension entitlement arises, you become compulsorily insured again, you die, you apply for a refund of contributions or, as an insured person who has not completed the qualifying period, you reach the age of 69 (Section 30 (3) VBLS). Anyone who does not reach the qualifying period and does not apply for a refund by that age loses the entitlement.
Qualifying Period and Vesting
The Qualifying Period of 60 Months
An occupational pension is only payable after a qualifying period (Wartezeit) of 60 calendar months (Section 34 (1) VBLS). Every month for which levies or contributions for compulsory insurance were paid for at least one day counts. Periods with other supplementary pension funds with which a transfer agreement (Überleitungsabkommen) exists are taken into account for the qualifying period. In the case of accidents at work, the qualifying period is deemed to have been completed under certain conditions (Section 34 (2) VBLS).
Periods of employment with a foreign employer and months only in the statutory pension insurance do not count.
Statutory Vesting under Section 1b BetrAVG
Alongside this, there is statutory vesting (Unverfallbarkeit): under Section 1b (1) sentence 1 BetrAVG, an entitlement is preserved if the employment relationship ends after the employee has reached the age of 21 and the pension commitment had existed for at least three years at that time. For moves within the European Union, Section 1b (1) sentence 6 BetrAVG expressly clarifies that the entitlement is preserved to the same extent as if the person had remained in Germany.
The VBL Statutes combine the two: under Section 34 (4) sentence 2 VBLS, the qualifying period is deemed completed for the part of the entitlement from compulsory insurance that is vested under Section 1b BetrAVG (in conjunction with the transitional rule in Section 30f BetrAVG). Anyone who was compulsorily insured with the same employer for at least three years without interruption and had reached the age of 21 on leaving will therefore, as a rule, later receive an occupational pension even with fewer than 60 months of insurance. A refund of contributions under Section 44 VBLS is then generally no longer possible, because it requires that the qualifying period has not been completed. For older commitments, Section 30f BetrAVG provides transitional periods with different age and time limits. Whether the three-year rule applies in your own case, for example after a change of employer within the public sector, should therefore be confirmed in writing by the fund before any decision on a refund.
Bonus Points and the 120-Month Threshold
A second, little-known threshold concerns the growth of the entitlement. Apart from compulsorily insured persons, bonus points from surpluses are only granted to persons with non-contributory insurance who have completed a qualifying period of 120 levy or contribution months (Section 68 (1) sentence 2 VBLS). Anyone who leaves with less than ten years of insurance and emigrates keeps their points, but these are no longer increased by bonus points until the pension starts. The fund points this out in the statement of insurance (Versicherungsnachweis) issued when compulsory insurance ends (Section 51 (1) sentence 5 VBLS).
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| Insurance period on leaving | Consequence under the VBL Statutes |
|---|---|
| under 36 months or without statutory vesting | qualifying period not completed; non-contributory insurance; refund of own contributions possible (Section 44) |
| three years or more with the same employer and leaving after reaching the age of 21, but under 60 months | qualifying period deemed completed (Section 34 (4) sentence 2); pension entitlement; no refund; no bonus points as a person with non-contributory insurance |
| 60 to under 120 months | pension entitlement remains; no bonus points as a person with non-contributory insurance |
| 120 months or more | pension entitlement; participation in the allocation of bonus points possible |
Refund of Contributions: Conditions and Limits
Many emigrants ask whether they can have “their VBL” paid out. Under Section 44 (1) VBLS, persons with non-contributory insurance who have not completed the qualifying period can apply, up to the age of 69, for a refund of the contributions they paid themselves. Three restrictions are decisive:
- Only if the qualifying period has not been completed. Anyone who has reached 60 months, or whose qualifying period is deemed completed because of statutory vesting, has no refund entitlement under the Statutes. Their entitlement will later be paid as a pension.
- Only own contributions. Only the shares borne by the insured person are refunded, such as the employee’s own share of the levy since 1999 and certain employee contributions (Section 44 (3) VBLS). The levy funded by the employer is not paid out. The refund is therefore often considerably lower than expected.
- Without interest, irrevocable. The contributions are refunded without interest. The application cannot be withdrawn, and when it is submitted the rights from the insurance periods concerned lapse (Section 44 (1) sentences 2 to 4 VBLS).
Anyone who applies for a refund shortly after moving away and returns to Germany years later to work in the public sector again cannot use the refunded periods for the qualifying period. Before submitting the application, you should therefore realistically consider whether a return to the public sector is a possibility.
Example (fictitious): Jana was employed on a fixed-term contract at a state university for two and a half years, i.e. compulsorily insured for 30 months, and then moves abroad. The qualifying period of 60 months has not been completed, and no statutorily vested entitlement exists yet. She can apply for a refund of her own contributions, but will receive only these, without interest. If she later returns and works in the public sector for another 30 months, the qualifying period would have been completed without the earlier refund. With a refund, the count starts again from zero.
Settlement of Small Pensions
Settlement (Abfindung) must be distinguished from a refund. If the qualifying period has been completed but the monthly pension is very small, it is settled if it does not exceed 1 percent of the monthly reference value (Bezugsgröße) under Section 18 SGB IV (Section 43 (1) sentence 1 VBLS). Pensions from compulsory and voluntary insurance are added together for this purpose. Of interest to emigrants is Section 43 (1) sentence 4 VBLS: the VBL should also offer a settlement for higher pensions if the costs of transfer are disproportionately high. The Statutes do not give an entitlement to this.
Start of the Pension and Application from Abroad
Link to the Statutory Pension
The insured event generally occurs when there is an entitlement to a statutory old-age pension as a full pension or to a reduced earning capacity pension; the entitlement must be evidenced by a notice from the pension insurance institution (Section 33 VBLS). The occupational pension starts with the statutory pension. Anyone living abroad who applies for the German pension should submit the application to the supplementary pension fund at the same time.
Anyone who does not meet the conditions for the statutory pension falls under the special rule in Section 45 VBLS; reduced earning capacity is then evidenced by a report from a specialist physician designated by the fund.
The Application Is Mandatory and Subject to a Time Limit
The fund only pays on written application (Section 46 (1) VBLS). The preclusion period in Section 52 sentence 1 VBLS is particularly important: claims for periods more than two years before the first day of the month of application can no longer be asserted. Complaints about amounts not paid or paid incorrectly are also only admissible within one year (Section 52 sentence 3 VBLS).
With consent, the written form requirement can also be met via the VBL customer portal (Section 46a VBLS), which makes communication from abroad easier. Changes of address must be notified to the fund immediately (Section 48 (1) VBLS).
Payment Abroad
The VBL transfers the occupational pension monthly in advance in euros to a current account within the European Economic Area and bears the transfer costs with the exception of the crediting costs (Section 47 (1) sentences 1 and 2 VBLS). Outside the EEA, the Statutes provide for significant restrictions:
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| Situation | Rule under the VBL Statutes |
|---|---|
| Account in the EEA | transfer in euros, costs other than crediting borne by the VBL |
| Account outside the EEA | payment at the cost and risk of the beneficiary; VBL may bear costs in whole or in part |
| Residence outside the EEA | payment may be made conditional on an authorised recipient in Germany |
| Payments to states outside the EEA | no obligation on the part of the VBL (Section 47 (1) sentence 6) |
| Residence outside the EU, no authorised recipient despite request | pension is suspended; VBL may allow exceptions (Section 41 (3) (b)) |
It is striking that Section 47 refers to the EEA, whereas Section 41 (3) (b) VBLS refers to the European Union. Anyone living in Norway, for example, should therefore clarify as a precaution whether the fund requires an authorised recipient. The same applies to Switzerland. A trusted person in Germany can act as the authorised recipient; an advance power of attorney when living abroad can usefully be coordinated with this role.
An account in the EEA avoids costs and exchange rate risks for pensioners in third countries. In addition, the fund requires evidence such as life certificates; if they are not submitted on time, the pension may be withheld (Section 48 (2) and (3) VBLS).
Taxation of the Supplementary Pension When Living Abroad
Classification under German Law
For tax purposes, benefits from supplementary pension funds are benefits from pension funds (Pensionskassen) and fall under Section 22 no. 5 EStG. The amount of the taxable portion depends on the tax support in the accumulation phase. To the extent that the pension is based on tax-free levies or contributions (for example under Section 3 no. 56 or Section 3 no. 63 EStG), it is generally fully taxable. To the extent that it is based on contributions taxed at a flat rate or paid from taxed income, only the income portion (Ertragsanteil) is taxed for life annuities under Section 22 no. 5 sentence 2 (a) EStG. The fund states the breakdown in its annual benefit statement.
Limited Tax Liability
Anyone who gives up their residence and habitual abode in Germany becomes subject to limited tax liability on domestic income. When habitual abode in tax law actually ends must be examined in the individual case. Under Section 49 (1) no. 10 EStG, other income within the meaning of Section 22 no. 5 EStG is domestic income. For persons with limited tax liability who only have such pension income (nos. 7 and 10), the Neubrandenburg tax office (Finanzamt Neubrandenburg) has local jurisdiction (Section 1 EStZustV).
Section 50 (1) sentence 2 EStG must be noted: for persons with limited tax liability, taxable income is increased by the basic tax-free allowance (Grundfreibetrag), so the allowance has no effect in the end. Anyone who receives almost all of their income from Germany can, on application, be treated as subject to unlimited tax liability under the conditions of Section 1 (3) EStG.
Double Taxation Agreements
Whether Germany may actually tax the supplementary pension is determined by the double taxation agreement (Doppelbesteuerungsabkommen) with the new state of residence. Many agreements allocate private pensions to the state of residence; some agreements provide for a source state taxing right for certain pensions. In addition, the agreements contain the paying-state principle (Kassenstaatsprinzip) for pensions from public funds. Whether a pension from the VBL or a municipal fund is to be classified under the relevant agreement as a pension from the public service or as an ordinary occupational pension depends on the wording of the individual agreement and cannot be answered uniformly. As a criterion for drawing the line, the case law of the Federal Fiscal Court (Bundesfinanzhof, BFH) focuses less on the legal form of the fund than on whether the benefit has the character of remuneration for services rendered or the character of provision from the person’s own contributions. If it is funded by the employer, this points rather to the paying-state principle; if it is based on the person’s own contributions, it is more likely to be taxed like an ordinary pension in the state of residence. Since the VBL pension has both levy-funded and contribution-funded components, a general answer is not possible. The basics are explained in the article on Double taxation agreements when emigrating. To prove residence to the German tax office, a certificate of tax residence (steuerliche Ansässigkeitsbescheinigung) from the state of residence is regularly required.
Because this classification may be open and concerns large amounts over many years, you should consider obtaining a binding ruling (verbindliche Auskunft) from the competent tax office under Section 89 (2) AO before moving away. A tax adviser in the new state of residence should be consulted on taxation there; they should also clarify whether a corresponding ruling is available there.
Health and Long-Term Care Insurance Contributions
Occupational pensions, including the public sector supplementary pension, are pension payments (Versorgungsbezüge) within the meaning of Section 229 (1) sentence 1 no. 5 SGB V. As long as you remain a member of the German health insurance for pensioners (Krankenversicherung der Rentner, KVdR), for example when resident in the EU with form S1, these payments generally remain subject to contributions; the fund deducts and pays the contributions as the paying agent. If membership ends because you move to a third country, the obligation to pay contributions based on it lapses. Details are covered in the article KVdR when retiring abroad. Anyone who emigrates before the pension starts will find information on ending the insurance in the article Cancelling German statutory health insurance when emigrating.
Voluntary Insurance and Riester Contracts with the Fund
In addition to compulsory insurance, the funds offer voluntary insurance, for example for deferred compensation (Entgeltumwandlung), in some cases with Riester support. Separate insurance conditions apply to these. For subsidised contracts, the rules on harmful use (förderschädliche Verwendung) also apply; the fund must be informed of a move of residence outside the EEA in the case of subsidised contracts (Section 48 (2a) (h) VBLS). For the consequences of moving away for the allowances, see the article on the Riester pension when emigrating.
Typical Mistakes in Practice
- Premature refund of contributions: The application is irrevocable, and only the own contributions are refunded, without interest. A later return to the public sector becomes more expensive as a result.
- Narrowly missing the qualifying period by mistake: Anyone planning a move abroad should check their insurance record beforehand. If only a few months are missing to reach the three-year vesting threshold, 60 or 120 months, the choice of leaving date can have significant consequences.
- Overlooking double taxation: Without clarifying the position under the agreement, taxes may be levied in both states or subsequent assessments may come from Neubrandenburg.
- Not checking the statement of insurance: Missing reports by the employer can only be challenged within six months of receipt of the statement (Section 51 (2) VBLS). From abroad, this deadline is easily missed.
Before moving away, you should therefore request the statement of insurance and make a conscious decision between a refund and retention.
Conclusion
The public sector supplementary pension is not lost on emigration; the insurance continues on a non-contributory basis. The course is set by the fund’s statutes: a qualifying period of 60 months, which is deemed completed after three years in the case of statutory vesting, a bonus point threshold of 120 months, an irrevocable refund of own contributions only, a duty to apply with a two-year preclusion period and restrictions outside the EEA. For tax purposes, Section 22 no. 5 EStG applies; which state may tax is determined by the agreement, and the classification as a pension from public funds may be open.
Frequently Asked Questions
Will my VBL entitlement lapse if I move abroad?
No. If compulsory insurance ends without a pension entitlement, the insurance continues as non-contributory insurance (Section 30 (1) VBLS). Residence abroad does not change this. Without a completed qualifying period, however, it ends when you reach the age of 69.
Can I have my supplementary pension contributions paid out?
Only if the qualifying period has not been completed and is not deemed completed because of a statutorily vested entitlement (Section 34 (4) sentence 2, Section 44 VBLS), and only the contributions you bore yourself, without interest. The application is irrevocable, and the rights from the refunded periods lapse. The employer’s levy is not refunded.
Will the VBL pay my occupational pension to any country?
Within the EEA, the VBL transfers in euros and bears most of the transfer costs. Outside the EEA, payments are made at the cost and risk of the beneficiary, there is no obligation under the Statutes to pay there, and an authorised recipient in Germany may be required.
Do I have to pay tax on the supplementary pension in Germany if I live abroad?
Under German law, with limited tax liability it is domestic income (Section 49 (1) no. 10 EStG), and the Neubrandenburg tax office is responsible. Whether Germany may actually tax it is determined by the double taxation agreement with your state of residence.
Are health insurance contributions levied on the supplementary pension abroad?
As long as you are a member of the German health insurance for pensioners, for example when resident in the EU with form S1, generally yes, because the supplementary pension is a pension payment under Section 229 SGB V. If membership ends, this obligation to pay contributions also lapses.
Attorney Dr. Johannes Fiala and the Munich-based firm, which focuses on international succession law, tax law and asset protection, advise former public sector employees on the supplementary pension in connection with emigration, from the decision on a refund of contributions and payment of the pension abroad to its classification for tax purposes under the double taxation agreement. Dr. Fiala has published extensively on questions of emigration and asset protection. Please get in touch with the firm without obligation to discuss your individual situation in an initial consultation.
