History

The system of statutory pension insurance in Germany is over 100 years old. After a series of social laws were enacted under Bismarck, disability and old-age insurance followed in 1889. But pension insurance as we know it today was still a long way off.

German pension insurance up to the Second World War

On 20 December 1911 the enactment of the Reich Insurance Code constituted an important step toward the development of a statutory pension insurance system. This decree gathered together the three areas of social security legislation pension, health and accident insurance under one central set of provisions. For decades to come, this code was to form the basis for all social insurance legislation in Germany.

On 9 August 1919 the Federation of German Regional Insurance Institutes (Verband Deutscher Landesversicherungsanstalten) was founded in Kassel. In addition to providing a forum for the exchange of ideas and for promoting common objectives, this association also had the task of working toward a general standardisation of pension law. Later, the other pension insurance funds joined this federation. In 1938 the group was transformed into a central organisation with the title "Imperial Federation of German Pension Insurance Institutes" (Reichsverband Deutscher Rentenversicherungsträger) .

German pension insurance after 1945

After 1945 the "Imperial Federation of German Pension Insurance Institutes" remained in place as the central organisation for pension insurance. In a resolution made on 3 May 1946 its name was changed to "Federation of German Pension Insurance Institutes" (Verband Deutscher Rentenversicherungsträger - VDR) . With the Act on Self-Administration passed 22 February 1951, self-administration of all social insurance funds became compulsory. In 1953 the insured and their employers were able for the first time to take part in free, closed ballot elections to choose their representatives in the social insurance funds.

Pensions through the years: fundamental pension reforms

The history of statutory pension insurance has been marked by a series of fundamental reforms. Probably the most important legal amendment was ushered in by the broad-scale Pension Reform of 1957. Groundbreaking improvements included equal treatment of blue-collar and white-collar workers, the "wage-indexed" pension formula that ties the amount of pension to the workers income, as well as the financing of pensions through contributions made by those still actively employed ("pay-as-you-go system"). The Pension Reform of 1972 for the first time opened up pension insurance to the self-employed and to housewives, allowed for more flexible age limits and established a "minimum-income pension" for those at the lower end of the pay scale.

Pensions in the international context: supranational and international provisions of the European Union

"Can I still receive my pension while living abroad?" - answers to questions like this are regulated by so-called "supranational and international law". Supranational law comprises all provisions that apply between the Federal Republic of Germany and the Member States of the European Union and the European Economic Area. These provisions, also known as migrant worker regulations, do not directly affect the social security systems in the Member States, but instead interconnect them with one another by means of joint provisions. International law comprises all treaties between the Federal Republic of Germany and another state that is not a Member State of the European Union.

For further information on pension reforms, the history of pension insurance and current legislation, please see the following: