Pension and pension gaps of civil servant professors.

An appointment as a professor can take many forms. There are professors in the employment relationship, as junior professors in the civil servant status on time, professors as civil servants on probation and lifetime. The sovereign duties they exercise as bearers of academic freedom permit a temporary civil service professorship only as a strictly limited, function-related exception. Thus the rule is the appointment as a civil servant for life. A professorship with the status of a civil servant for life can be advantageous from a pension point of view in comparison to employment, in addition to other privileges. Status often has a decisive effect on the amount of a pension.

In what follows, I will focus on professorships in tenured status. For faster readability I use the masculine form.

The pension claim is often much more complicated to determine compared to "normal" civil service careers. This complexity results for professors from the previous periods of service, for example in the public service as a research assistant, doctorate, habilitation, some appointment requirements, such as specified national or international professional experience and the associated different attributions of these periods to this "mixed civil service career". The whole thing is then topped off by the public and other pension entitlements from very different systems that often arise with it. This refers to statutory pensions, VBL, company pensions, other international pension systems in Europe or, for example, in the USA. On top of that, a professor’s salary and thus also his or her pension usually consist not only of the basic salary, but also of performance-related pay from W2 onwards. Their pensionability in the event of incapacity for service in the case of professors also depends on promises made by the employer.

It is only possible to take a brief look at this here and, as a first recommendation, to make this an issue from the very beginning of a professorship, i.e. already in the appointment negotiations.

From junior professor to professor for life?

The junior professorship is now a common way for the best young scientists to enter research and teaching after an outstanding doctorate and thus, as a substitute for the habilitation, to get the chance to become a professor for life. Proven junior professors almost always become regular professors. Some are given a quasi-guarantee of a tenured professorship through a tenure track. However, since we are dealing with pensions here, this chapter can be kept short. Junior professors in temporary civil service status are usually appointed for a period of 3 years.

After this time and with the probation, this can be done once by max. 3 years are extended. retirement or transfer to retirement is excluded. The civil service relationship ends with the expiration of time. In the event of incapacity for service, one would be dismissed from the civil service relationship. Thus, the pension consists of a supplementary insurance in the statutory pension scheme.

How the pension of the civil servant for life is calculated?

This can initially be reduced to a very simple formula. The amount of pension benefits paid by the employer -when the age limit for professors is reached- depends mainly on the amount of pensionable salary, the length of service achieved and a coincidence with retirement benefits from other i.d.R. public coffers together. Only with a pensionable service period of 40 years do professors reach the maximum pension of 71.75% of their last pensionable service remuneration. This would be quite simple, if one graduates with a doctorate at the age of 27, becomes a junior professor, then a professor for life and remains a regular professor until at least the age of 27. 67 years of uninterrupted full-time service in the office would be.

But in reality there are not only such careers. As a rule, university lecturers have been on the road professionally for a long time before they are appointed as a professor in a tenured civil service position. In the case of these "mixed careers", the details of the periods are very important. For there are periods that are pensionable by law, periods that should be recognized, and periods that may be recognized. The latter play a role in "mixed careers" with claims from e.g. a special, regulating role for a company pension plan. The questions arise: which periods will be recognized as pensionable, which parts of the remuneration will be pensionable and in what amount?

Which (previous) periods of service are pensionable?

It is thus subdivided into times, which must be credited pensionable, are to be recognized and can be recognized. They therefore differ in their degree of liability. The bottom line is that this level for professors is influenced by the different appointment requirements and the extent to which other, scientific qualification periods (optional periods) are pensionable. These are periods of special professional experience spent in the private sector.

In this case, the consideration of optional periods as pensionable periods of prior service is reduced at the time of retirement if the combination of benefits from public funds (pension and statutory pension) with other benefits from occupational pension schemes (e.g., retirement pension) results in a reduction in the pensionable service period. employer-sponsored company pension scheme) leads to a better position in the overall pension scheme compared to a "civil servant-only" career.

Among the periods that are pensionable by law are, include periods of military service, or periods in lieu of military service, as well as periods in a civil servant relationship. The time spent as a member of the teaching staff of a German university following habilitation.

According to their degree of commitment, the following periods can still be taken into consideration: the preparation period for the doctorate, it should be are taken into account with up to 2 years. Special professional activities prescribed as a prerequisite for appointment, Shall with max. 5 years are recognized.

Total can eligible professional activities with up to 10 years (5 years full, beyond that half) are recognized, as well as the university studies and the habilitation period with up to 3 years each (i.d.R.). Part-time employment is only taken into account on a pro rata basis and, for example, leave of absence without pay is not taken into account at all. Child-rearing periods without salary are therefore not pensionable.

The pensionability of periods is to be decided on appeal. For this purpose, the professor must submit an application. However, this promise does not change the fact that the final facts will only become clear upon retirement. Thus, "today" one can only "predict" a relative statement about the total pension at the time of retirement.

As a tip, I can state at this point that it is quite sensible to have the discretionary consideration of optional periods checked by experts upon retirement.

Which salaries are pensionable for a professor??

First of all, the basic salary has an alimentary character and is intended to ensure the financial security of the active civil servant and in retirement. In some federal states, there are also grade levels within the salary scale for professors (e.g.B. in Hesse level 1 to 5). This is intended to take into account professorial or equivalent experience periods from the individual professional biography at the time of initial appointment. Which does not mean that one earns more with it than in another federal state without experience levels. In sum, step models can also mean a lower overall salary. In the supply it is however again comparable, since the final stage of the salary is usually reached.

The most important of these are university benefits, which differ in type, duration and amount. They often increase the salary considerably and will also determine the amount of the pension.

The last full basic salary from the respective grade W2 or W3 at the time of retirement, the family allowance of level 1 and the pensionable portion of the university performance-related pay are pensionable.

Performance pay is intended to strengthen the competitiveness of universities and reward individual performance by professors. As a rule, there is no legal entitlement to performance pay. They are at the discretion of the universities and are limited in the amount granted. In Brandenburg, for example (§ 34 BbgBesG), this limit is the difference between salaries in W3 and B10. Which at least opens up a margin for EUR 7151 (salary table 2021).

They may only exceed this limit in exceptional cases in order to attract or retain a professor. In the respective salary regulations, a distinction is made between remuneration for appointment and retention, remuneration for special achievements in research and teaching, and research and teaching allowances for third-party funding. There are also function allowances, as far as one carries out tasks in the university self-administration. The rule is appointment and retention performance pay and is the focus here, also with regard to the appeal hearing. Because this is the time when a lot can be agreed upon.

Temporary or permanent university performance-related pay?

University performance-related pay is divided into fixed-term and open-ended performance-related pay. Here it now comes down to the questions: Whether they are pensionable at all, or from when and to what extent? By law, only permanent appointment and retention allowances and special performance allowances are pensionable, provided they have been received for at least two years at the time of retirement. In Saxony (for example), the pensionability of unlimited university allowances must be guaranteed by a separate declaration. If open-ended performance bonuses are revoked, they could possibly be. are taken into account as temporary. Temporarily granted performance pay does not include a guarantee for pension consideration. Rather, these merit pay awards must have existed for a total of at least ten years if they are awarded repeatedly and must also have been declared pensionable. Here it does not depend on the fact that they still exist in the pension case, or existed without gaps.

Simultaneously existing, fixed-term benefit payments can be cumulated if they each exceed the o.g Meet requirements. Non-concurrent merit pay is included in the more favorable amount if it exceeds the o.g meet the requirements. Several unlimited performance bonuses are cumulated, if they are paid at the same time as the retirement age. have existed for 2 years. Temporary and permanent benefits awarded at the same time can be accumulated if they have existed for 10 years. However, there are also variations in the federal states, such as in Saxony, where pensionable temporary benefits may only be taken into account in the proportion exceeding the permanent pensionable benefits (§ 37 SachsBesG).

In addition, the amount of pensionable performance-related pay for all permanent and temporary performance-related pay is generally maximized to a maximum of 40% of the respective basic salary (depending on the federal government/state, this may be less – e.g., the amount of pensionable performance-related pay may not exceed 40%). 21% / 28% / 30%-, also regulated as a basic benefit to be offset). This can be deviated upward.

Not all merit pay participates in general grade adjustments, or not to the same extent. Perhaps also a topic for the appointment hearing.

Special features when several pension systems coincide

A regular peculiarity of the professors’ pension scheme is the coincidence of benefits from old-age pension schemes of the public funds and other pension schemes. The employer is thus just as regularly obliged to make a comparative calculation of the professor’s total pension from this "mixed career" with a theoretical professorship in a "civil servant-only career". This consideration is intended to avoid a better position compared to "civil servants only". In this way, however, a worse position can also be avoided if optional periods become (must be) pensionable. First, the employer determines, here simplified for retirement at age 67, by how much the sum of pension entitlements and statutory pension (o.a.) exceed the fictitious maximum limit (71.75% of the pensionable remuneration from W2/W3). In the case of salary scales with steps, the final step of the respective. The exceeding part is suspended in the civil service pension scheme. Subsequently, other pension systems (bspw. company pension scheme with significant employer participation, or similar foreign pension benefits not covered by an agreement) is added. This would result in a better position for this "mixed career". The employer now reduces the optional periods as far as possible until the total pension (from further reduced pension, in total with statutory and company pension) has reached approximately the same level as "civil servants only. The reduction of optional periods may not lead to a shortfall of the maximum limit.

What is the need for coverage for professors??

Two pension questions can be asked here: First, what is the coverage in the event of invalidity, and second, what is the coverage in the event of retirement?? In the case of junior professors, the question is quickly answered, since they basically have no coverage by the employer in the event of incapacity to work. You are regularly laid off. This means that there is a great need to protect oneself against the financial consequences. Here, one should also not rely on the subsequent insurance in the statutory pension, because this could only result in claims in the event of a reduction in earning capacity. In fact, this is a different standard. Planning for retirement also makes sense at this point, since your career path is not yet secure.

In the case of tenured professors, there are additional points to consider. In order to have regular pension claims against the employer, the legislation requires a fulfilled pension waiting period. This amounts to 5 years. It is therefore possible to be a professor for life without having pension rights. With the first appointment as a professor for life, the military service and replacement periods (if available) and the doctorate as a target period could perhaps amount to 3 years as a waiting period. That still leaves at least two years. In the event of incapacity for service, one could also be dismissed and subsequently insured in the statutory pension scheme. The protection by the employer is missing (still). Thus in this phase the need of the security is particularly large.

However, professors for life with fulfilled waiting period under pension law are not in a pension paradise. In case of disability, there is a coverage of about 35% of the pensionable salary, but since the salary consists of basic salary and university allowances, a financial decline would be significant if these are not, or not yet, or only proportionally pensionable. It can be stated that professors receive a high salary, but have significantly lower pension entitlements. Here, too, there is a considerable need to protect oneself against the financial consequences of incapacitation.

In this context, individual livelihood security thus quickly means a monthly hedging requirement of several thousand euros against the financial consequences of illnesses (incapacity to work).

With this, a look can now be taken at old-age provision. Let’s assume long periods of very good pay, with the associated high standard of living. A good salary with additional university allowances, which are not or only proportionally pensionable, is then evenly in the retirement no just as good retirement provision. This must be evaluated individually according to the needs. Exclusively privately financed old-age provision never falls under the suspension and consideration regulations. If one wants more care than that of a "civil service only" career, then one cannot get around private provisions. Old-age provision can make a lot of sense in spite of civil servant pensions, especially if there is an increased need due to the family situation. Possibly tax-subsidized basic pension products offer particularly good effects here. The issue of a necessary survivor’s pension should also be considered in this context.

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