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Out Now: Employee-financed deferred compensation in the private sector in the 2010s

Geyer, Johannes; Himmelreicher, Ralf (2022)

News from Apr 25, 2022

published in: Deutsche Rentenversicherung 1/2022, p. 70-88.


Abstract: 

Using representative data for the private sector, we examine shares and amounts of deferred compensation by individual and firm characteristics of employees in Germany for the years 2010 to 2018. The evaluations indicate a selective willingness to participate in conversion and an increased willingness to convert higher pay as income rises. There are differences between women and men, between East and West Germany and between different sectors. In the low-wage sector and among marginally employed persons, conversion of salary is barely common. On the other hand, the proportion of employees at the upper end of the income scale who convert parts of their wages is particularly high. For low-skilled workers in typical low-wage industries, the declining pension level is rarely compensated by supplementary salary conversion.

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