Career breaks for a round-the-world trip or for further study are popular.
In this context, pension planning is an important aspect that needs to be considered.

Are you toying with the idea of taking a sabbatical? You might simply be wanting to escape everyday life and travel abroad for a longer period of time, pursue your own projects or undertake further education or training. A lovely prospect that many people are considering and starting to plan for, particularly since the pandemic. But before you hand in your notice at work or take unpaid holiday leave, you shouldn’t just be worrying about your project budget: your financial pension situation needs careful thought too. This will ensure that you can also maintain a reasonable standard of living in retirement and not be suddenly confronted with unpleasant surprises. The impact on your pension provision may vary depending on how long the sabbatical is.

Simple pension planning for a short sabbatical

Shorter sabbaticals of up to three months are usually legally covered by old-age and survivors’ insurance (OASI), which means that you are protected throughout the period against risks such as disability and death due to illness or an accident. In this case, your occupational pension provision, the 2nd pillar, also remains unaffected if you stay with your employer. However, before you take your sabbatical, clarify how long your daily sickness benefit and accident insurance coverage are valid for. In order to guarantee an extension of your accident cover, you can usually take out an interim insurance policy through your employer or arrange your own insurance with a health insurance scheme. You should also decide whether to still pay contributions to your pension fund during your sabbatical. This can have a positive impact on your financial situation in the long term.

Open a vested benefits account after resigning

If you resign from your job, you will usually remain protected against the risk of death and disability under your previous employer’s pension fund for another 31 days in accordance with the minimum insurance period. The duration of the pension benefits depends on your pension fund. At best, your pension fund can continue the benefits for up to 24 months while you are on your sabbatical. In some cases, you can continue the insurance with your pension fund on a voluntary basis once your employment contract has been terminated. This requires you to pay the contributions on your own, without support from your employer. The exact conditions and options will vary depending on the pension fund. You can also continue to take out voluntary insurance with the Substitute Occupational Benefit Institution. Once you have resigned, however, you can generally open a vested benefits account during your sabbatical or until you are in a new job. The pension fund capital you have saved up until then will then be transferred into this account.