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This article explains how to set up and manage a company pension scheme (betriebliche Altersvorsorge; BAV) with Personio Payroll.

What is a company pension scheme in Personio Payroll

In Personio Payroll, you can manage the relevant information of the your current company pension scheme (Betriebliche Altersvorsorge; BAV). The feature: 

• Validates agreement entries.
• Divides contributions correctly into tax-free/taxable and social security-free/subject to social security contributions and takes into account the applicable exemption limits.
• Lists contributions in documents (payslips, payroll accounts, etc.).
• Issues a pension scheme (BAV) SEPA file that can be used to transfer contributions to insurance providers via online banking.

The Pension Agreements widget in the Salary tab of the employee profile gives you an overview of the yearly or monthly amount.

The following article explains how to create and manage a pension scheme (BAV) agreement, and where in the payroll the pension scheme (BAV) amounts are displayed. For further context on the company pension scheme and applicable regulations, we recommend reading through our general article on the topic.

Note
Since January 1, 2022, Employers are obliged to pass on an additional 15% of the converted salary as an employer contribution to pension funds, pension schemes or direct insurance companies, provided that social security contributions are saved.

Product limitations

The function for storing company pension agreements does not currently support the following cases:

• Internal implementation channels and payout phase for company pensioners: The function currently only allows external implementation channels (direct insurance, pension fund, pension fund society) for company pension schemes. Internal implementation methods and the payout phase for company pensioners are not supported.
• Conversions of one-time payments not equal to at least the amount to be converted: In the case of conversions of one-time payments, the one-time payment must be at least the amount to be converted. If €3,000 is to be converted, there must be a one-time payment of at least €3,000 in the respective month. Differences cannot be compensated by an ongoing salary.
• Block model: This function currently only calculates the tax or exemption of social security contributions according to the entry model. Under this model, if the allowances for the company pension scheme are used up during the year, contributions to social security and tax may be due.
• Dynamic contributions: This function currently only covers agreements with fixed contributions. Contracts with a clause that adjusts contributions annually according to the current tax-free thresholds will need to be changed via a manually added agreement.
• Subsequent changes in the BAV SEPA file: The function currently only covers the contributions deposited in the BAV agreement at the time the accounting is released. Retroactive changes (for example, the correction of a contribution that is too low or too high) are not taken into account in the following month. The system then adjusts to the newly deposited contribution. Overpayments or underpayments must be settled directly with the employee and the insurance company.

Manage pension scheme (BAV) agreements in the salary tab

An overview of how to manage pension scheme (BAV) agreements

You can add, edit, break, delete and terminate BAV agreements in your employees' Salary tab. The following table explains how they are generated for different events (for example, an employee's contribution increase):

Note:
Ensure you follow the applicable regulations when filling out the company pension scheme agreement. You can find further information in our article on the BAV. 

 

Order of priority for multiple company pension schemes

If you create multiple BAV agreements for an employee that are active at the same time, we will apply rules for the ranking of the individual agreements. These ensure that when social security or tax allowances are reached, the higher-ranking company pension scheme agreements are taken into account first. The ranking is based on the following criteria:

1. Private pension agreements that are financed exclusively by the employer are ranked higher than those that require employee contributions.
2. The earlier the start date of the occupational pension agreement, the higher the ranking. In the case of amendment agreements, the start date of the original agreement is also used.
3. If multiple agreements begin in the same month, the agreement first entered into the account takes precedence.

Note
If you create a new BAV agreement for a supplementary agreement or an adjustment agreement, the new agreement always "inherits" the rank of the agreement it relates to. 

Add a new pension scheme (BAV) agreement

To create a pension scheme (BAV) agreement, follow these steps:

1. Go to the employee profile of the relevant employee and open the Salary tab.
2. Click on Manage in the pension scheme agreements widget.
3. Click on Add agreement.
4. Add the start date of the agreement The end of the agreement is initially optional.
5. Choose the applicable agreement details. If the contribution should be paid as a SEPA bank transfer, select it under Payment type.
6. Click Save.

Terminate a company pension scheme

To terminate a company pension scheme agreement, you need to enter a termination date. The following options can be used:

• If the end date was entered when the agreement was created, the agreement will expire on the date you enter.
• If the end date has not yet been entered, open the agreement and click on the pencil icon next to the agreement ends, enter the date and confirm your entry. Note that this change is applied retroactively.
• If the end date is changed (for example, to an earlier date), open the agreement, and click on the pencil icon next to Termination date of agreement. Enter the date. Note that this change is applied retroactively.

Edit a company pension agreement

Note
Changes to an existing company pension scheme agreement will be applied retroactively from the start of the agreement.

To edit a company pension agreement, follow these steps:

1. Go to the employee profile of the relevant employee and open the Salary tab.
2. In the Pension scheme Arrangements widget, click Manage.
3. Click on the BAV agreement you wish to change.
4. Click on the options button with the three dots at the top right of the agreement and select Edit/Add details or agreement type.
5. Select the type of change you would like to make:
   1. Create an amendment to the existing agreement
   2. Create a new additional agreement and keep the existing one
   3. Edit existing data
6. Fill in the required fields. The insurance provider is taken from the original agreement for modification and additional agreements.
7. Click Save. 

To terminate a company pension (BAV) agreement

To terminate a company pension (BAV) agreement, follow these steps:

1. Go to the employee profile of the relevant employee and open the Salary tab.
2. In the Pension scheme Arrangements widget, click Manage.
3. Click on the BAV agreement you wish to change.
4. In the agreement, click the options button with three dots in the top right corner and select Add break to agreement.
5. Specify the start date and optionally the end date of the interruption and a comment.
6. Click on Confirm. 

Delete a BAV agreement

To delete a company pension agreement, follow these steps:

1. Go to the employee profile of the relevant employee and open the Salary tab.
2. In the Pension scheme Arrangements widget, click Manage.
3. Click on the BAV agreement you wish to change.
4. In the agreement, click on the options button with the three dots at the top right and select Add pause to agreement or Delete agreement.
5. Click Delete. 

In payroll

Company pension agreements in payroll accounting and salary accounting

If a company pension scheme agreement has been added for an employee, this is also reflected in the payroll. You'll find:

• The People tab: By clicking on the gross amount, you can see the total of the company pension scheme contributions under Recurring compensation.
• The payslip preview: Check it either in the detail view or in the Documents tab. Here, the components of the company pension scheme agreement are listed individually.

Retrieve BAV SEPA file

The BAV SEPA file in XML format is generated when the payroll is approved. The file contains all contributions for which SEPA transfer was selected as the payment type. Contributions with the payment type direct debit are excluded from the SEPA file.

You can use this file to transfer company pension contributions to the insurance providers. The payment information is taken from the data stored in the individual agreements. You can access it under the Documents tab in the Payroll. Note that the amounts in the SEPA file do not take into account subsequent changes .