The core of the Retirement Income Act is the harmonisation of the taxation of old-age pensions through a general transition to a system of deferred taxation. To this end, it is envisaged in the final stage that old-age pensions will in principle be taxed in full - as civil servants' pensions have been to date - and that contributions made to build up old-age pensions will be exempt from income tax.
In addition to these constitutionally required legal amendments, further changes were made in the following areas:
- New regulations for occupational pensions,
- Simplification of funded private pensions (Riester pension), and
- Limitation of the tax privilege for endowment life insurance policies
Note
You can also find information about the Retirement Income Act in the "Tax Tips for Seniors".