How to Cancel Your German Company Pension Plan

We explain when you can cancel your company pension plan and how to do it. Incl. free cancelation letter templates.
Dr. Chris Mulder

Dr. Chris is a former Senior Economist and Manager at the IMF and The World Bank. He is a Hypofriend Co-founder.

Published on Mar 16, 2023 Published on Mar 16, 2023 . Updated a month ago

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Dr. Chris is a former Senior Economist and Manager at the IMF and The World Bank. He is a Hypofriend Co-founder.

We have said this many times and will not tire of saying it: Company pension plans, especially in the form of direct insurance (known as "Direktversicherung" in German) are rarely a good deal and we would recommend you not to take out such a contract. But what can you do if you have already signed up? We show you when you can cancel your company pension plan, how to do it, and what the alternatives are.

The key points

  • Only if the value of your direct company pension plan or bAV is under about 4.242 € you can cancel.
  • You will also need your current employer to cooperate.
  • But you can stop contributing at all times, and that makes a lot of sense in most situations
  • Your next steps

  • We have included a template that you can send to your employer, when your contract is through your current employer or the insurance company, in case you took over the contract from a former employer.
  • The cancelation or a contribution pause should be effective the next month.
  • Make sure you consider an alternative way of saving for your retirement, be it an own home or a private pension plan, as your public pension alone is not enough.