Employees have a legal entitlement to a transfer of the pension assets accrued at former employers. When they change job, they can either leave their pension where it is or take it with them to their new pension provider. This value transfer means that they will receive their entire pension from their employer’s pension fund or insurer. A value transfer can be effected within a certain time period after the change of job and pension scheme. If a pension fund’s coverage ratio is too low (<100%), a value transfer is not possible.
A recent change is that small pensions (less than approx. 500 euros per year) are now automatically transferred to the pension fund in which the participant is accruing a pension. In the past, small pensions could be commuted by the pension provider. An automatic transfer means that money intended for a pension is actually used for this purpose, also for employees who frequently change job and therefore pension fund, and accrue small pensions on each occasion. This also avoids the situation in which a pension fund has to continue to administer small pensions for dozens of years before these come into payment.