Is company pension worthwhile for expats?

bAV in Germany usually works through salary conversion (Entgeltumwandlung): a portion of your gross salary flows into a pension contract instead of being paid out to you as net. This reduces both your taxable income and your social contributions today. The trade-off is that the resulting pension is taxable when it pays out later, and your statutory pension entitlements grow slightly less, because the contributions on the converted portion are smaller.

The thing that usually decides whether bAV is worthwhile isn't your salary level — it's the employer subsidy. Some employers add a fixed share on top, some only the legally required minimum, and some go meaningfully beyond. When the subsidy is generous, the maths can work strongly in your favour over a long horizon; when there's only the legal minimum, it depends much more on your specific tax situation and how long you'll stay in Germany.

For expats, the practical question is what happens if you leave. Most bAV contracts can be paused, and the accumulated capital usually stays invested until retirement — but transferring it abroad efficiently is rarely possible.

A reasonable rule of thumb: the closer you are to retirement and the longer you plan to stay, the better bAV looks. The more uncertain your residence plans, the more carefully you should size your contributions. And before signing anything, ask HR exactly what the employer subsidy is and under what rules — that single answer often decides whether bAV is worth doing at all.