Occupational pension adjustment in Germany — the minimum increase under BetrAVG s. 16
The employer reviews an adjustment every three years. The duty is deemed met if the pension rises at least as much as the consumer price index or the net pay of comparable employees. An employer who commits to at least one per cent a year need not review at all — but only for pensions based on promises given after 31 December 1998 (BetrAVG s. 30c(1)).
2026 rules — verified on September 28, 2026Free, no account
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Sources and assumptions
- gesetze-im-internet.de — BetrAVG § 16 Abs. 1 (l. 6) — tax year 2026, verified on September 28, 2026
Excerpt from the source : « Der Arbeitgeber hat alle drei Jahre eine Anpassung der laufenden Leistungen der betrieblichen Altersversorgung zu prüfen und hierüber nach billigem Ermessen zu entscheiden »
- gesetze-im-internet.de — BetrAVG § 16 Abs. 3 Nr. 1 (l. 13) — tax year 2026, verified on September 28, 2026
Excerpt from the source : « der Arbeitgeber sich verpflichtet, die laufenden Leistungen jährlich um wenigstens eins vom Hundert anzupassen »
Calculation assumptions
- Index values and the rise in net pay are inputs: they are not in the Act but come from the Federal Statistical Office and the company's own data.
- The result is the adjustment that counts as meeting the duty under s. 16(2) — not the equitable decision under s. 16(1). The employer's economic position (s. 16(4)) is not assessed.
- A fall in the index brings no cut: s. 16 governs adjusting pensions in payment, not reducing them. The index is passed on proportionally — a disclosed assumption, as the Act gives no formula.
- The review period runs from the start of the pension to the adjustment date, for the index and for net pay alike (settled case law of the Federal Labour Court (BAG), e.g. 3 AZR 249/12). The threshold is therefore worked out on the initial pension and compared with the pension paid so far; adjustments already paid are credited against it.
- Under a one-per-cent-a-year commitment, each increase is applied to the pension already adjusted, over one three-year review cycle. Direct insurance, Pensionskasse and defined contribution with minimum benefit (s. 16(3) nos. 2 and 3) are not calculated, nor are payout plans (s. 16(6)). The exemption from review under the one-per-cent commitment applies only to promises given after 31 December 1998 (s. 30c(1)); for older promises the three-yearly review under s. 16(1) and (2) remains mandatory.
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This result is provided for information purposes only and does not constitute personalised tax advice. Check your situation with the tax authorities or a professional.