The pension formula according to German law is used to calculate the amount of the individual monthly statutory pension . It is standardized in of Book Six of the Social Code ( SGB VI ). In this formula, the entire pension law periods from the insurance life of the insured person are brought together. The respective pension is determined on the basis of the individual employment history.
The monthly gross pension is calculated by multiplying the personal earnings points determined during the insurance life taking into account the access factor by the pension type factor and the current pension value.
For the miners' pension insurance special rules apply ( to SGB VI)
The pension adjustment formula is to be distinguished from the pension formula , according to which the current pension value is calculated every year on July 1st.
The pension formula
Mathematically noted the formula is:
- Monthly pension = EP ZF RAF aRW
|Monthly pension||Monthly gross pension in euros|
|EP||Sum of earnings points based on the insurance history|
|RAF||Pension type factor|
|aRW||Current pension value in euros|
The product EP · ZF gives the personal earnings points .
The acronym EZRA (actually EZRa ) results from the first letters of the factors , which is why the pension formula is sometimes also called the EZRA formula .
Earning points (EP)
The sum of earnings points reflects the relative insured income position during working life. An insured wage equal to the average wage for a calendar year results in one full wage point.
For certain non-contributory periods, earnings points are credited, the amount of which depends on the amount of insured income during the rest of the period.
Access factor (ZF)
If an insured person retires sooner or later, this fact is taken into account by the access factor. This balances out the advantages and disadvantages of different pension periods. The access factor is 1.0 if a retirement pension begins with the regular start of retirement. If a retirement pension starts earlier, it is less than 1.0 and if the start of retirement is postponed beyond the standard retirement age, it is greater than 1.0.
Pension type factor (RAF)
The pension type factor determines the security objective of the respective type of pension in relation to an old-age pension. For types of pensions with a wage replacement function, it is 1.0 and for types of pensions with a maintenance function, it is less than 1.0.
Current pension value (aRW)
The current pension value is adjusted on July 1st of each year depending on the development of gross wages and salaries, the contribution rate to the general pension insurance and demographic changes ( sustainability factor ). The rate of pension adjustment is calculated according to the pension adjustment formula.
Numerical examples for the applied EZRA formula
- An employee born in 1946 has worked for 45 years in West Germany subject to pension insurance and has always earned wages equal to the average wage (West), so that he receives one earnings point per year. At the age of 65, he will retire on the planned date in autumn 2019. This results in the following pension calculation: 45 earnings points (EP) × 1.0 (ZF) × 1.0 (RAF) × 33.05 EUR (aRW) = 1,487.25 EUR monthly gross pension. The pension type factor of the regular old-age pension is 1.0. The access factor is 1.0 when retiring at the legally stipulated date. The current pension value in autumn 2019 was EUR 33.05. It changes on July 1st every year.
- For another West German employee, who also retired in autumn 2019, the wage subject to contributions was always exactly 2/3 of the average wage, which corresponds to 0.6667 EP per year. After 45 years of work there is then a pension entitlement of 30 earnings points. The amount of his regular old-age pension was calculated as follows at the start of retirement in 2019: 30 (EP) × 1.0 (ZF) × 1.0 (RAF) × 33.05 EUR (aRW) = 991.50 EUR.
- A partial reduction in earning capacity is determined for an employee born in 1980. A total of 30 earnings points are determined for his contribution periods and other pension law periods. The pension type factor of the pension due to partial disability is 0.5. Since he takes the pension before he turns 60, the access factor is reduced to 0.892, so that from autumn 2019 he will receive a monthly partial disability pension of 30 (EP) × 0.892 (ZF) × 0.5 (RAF) × 33, 05 EUR (A) = 442.21 EUR received.
Before January 1, 1992, the pension formula was:
- Annual pension = r · n · p · B
|Annuity annually||Annual gross pension in DM|
|r||Rate of increase; it is 1% for disability pensions and 1.5% for disability and old-age pensions|
|n||Insurance years; they include contribution periods, replacement periods (e.g. military service ) and downtime|
|p||Average personal percentage, formed as the sum of one's own gross annual earnings as a percentage of average earnings|
|B.||General assessment base , which was redefined annually (in DM)|
The product p · B resulted in the personal assessment basis; this could not exceed twice the general assessment basis.
- At the end of 1979 (assessment basis 1979: DM 21,068) an insured person after 40 years of work (in which he always had an annual gross income that was 25% above the respective average wage) was entitled to a retirement pension in the amount of:
- 1.5% (old-age pension) × 40 (years of work) × 125% (gross income) × 21,068 DM (assessment basis) = 15,801 DM / year = 1,316.75 DM / month.
- German pension insurance: pension formula
- Pension calculation factors. Information magazine for senior citizens
- SGB VI
- Meyer's new lexicon . tape 6 , Oe – Rt. Bibliographisches Institut, Mannheim / Vienna / Zurich 1980, ISBN 3-411-01756-2 , p. 551 f .