Golden Rule

If you work continuously until you retire, the statutory old-age credits of the occupational pension scheme result in an old-age credit which, converted, corresponds to a pension of 34% of your last coordinated salary (at a conversion rate of 6.8%).

However, this ratio between pension and wage will only be achieved if the golden rule is applied. This rule states that the interest rate on the retirement assets must be the same as the average wage increases. With the golden rule, the ratio between your coordinated wage and the projected old-age pension at the time of ordinary retirement always remains the same, regardless of whether the rates are 1% or 2%.

The golden rule is essential for calculating the appropriateness of pension plans. The golden rule limits the interest rate that may be applied to compound interest. It may only be set as high as the average salary increases. An interest rate of 1.5 to 2 percent is accepted for tax purposes.

Excel sheet with the calculation of the Golden Rule

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