The Job Security Agreement offers those who have been made redundant before 1 January 2015 the option of choosing pension benefits if they, at the latest during the notice period, become 61 years of age. For redundancies in 2015 or 2016 the transitional provisions of the new Transition Agreement provide the same terms.
For those who risk being made redundant and who had reached the age of 61 before their notice period expires, it is possible to choose pension benefits. These pension benefits may be retained even if the employee then chooses to be available for work.
According to a transitional provision in the new Transition Agreement, if you are made redundant in 2015 or 2016 and have become 61 years old during the notice period at the latest, you are entitled to choose pension benefits if, at the time you are made redundant, you have been a state employee for at least 10 consecutive years.
Calculation of pension benefits
Pension benefits are calculated on the same pension basis (PB) as the defined benefit occupational pension, i.e. on the basis of the pensionable salary of the five calendar years immediately preceding the retirement year. The pension basis is an arithmetic average of these five years all translated into retirement year value by using the price base amount (PBA) of each of year.
Pension benefits = X * PB * TF
The percentage (X) is 101% of the pension basis for the first income base amount and 65% for the remaining IBA up to 20 IBA. Then 32.5% of between 20 and 30 IBA. Estimate pension benefits in this manner for the year and the divide by 12 to obtain the monthly amount.
Calculation example: if the pension basis (PB) is 7 * base amount (IBA), the annual pension benefit is (1.01+ (7-1) * 0.65) * IBA TF = 4.91 IBA TF which is about 70.14% of PB if the employment time factor is equal to 1. (Note that here, the number of months of pensionable service does have an impact.)
Employment time factor (TF) is the number of pensionable months divided by 360 (= 30 years * 12 months). For those who have received pension benefits and then reach the age of 65, the earning period up to 65 years of age will be counted when their future occupational pension is calculated.
More on pension benefits
Pension benefits are paid until the month before the 65th birthday. The period up to 65 years of age is counted as pensionable service for defined benefit retirement pensions. Contributions to the defined contribution occupational pension also continue as a percentage of the pension basis. The national retirement pension is affected negatively, albeit not significantly, in that occupational pension paid out does not generate pension on the national retirement pension system.
Special pension benefits
Anyone who is between 55 and 61 years and was made redundant from state employment before 1 January 2015 may apply for special retirement benefits. These may be granted if the person, at 61 years of age or later, is no longer entitled to unemployment insurance benefits.
Upon termination of employment that takes place 1 January 2015 or later there is also an opportunity under the new Transition Agreement to, after consideration, be granted special pension benefits. This requires that the person is aged 62, was at least 57 years old when they left state employment and at that time had been employed for at least seven years by the same state employers. If there are exceptional reasons, the special pension benefits may be granted earlier than at the age of 62.
Special retirement benefits are calculated in the same manner as, and are essentially the equivalent of, pension benefits.