What happens to my company pension if my employer goes bankrupt?
In short
What happens to my company pension if my employer goes bankrupt? Mostly it stays protected. For direct promises and support funds the insolvency fund PSVaG takes over, up to EUR 11,865 a month in 2026. Direct insurance, pension funds and Pensionskassen sit outside the company. Only vested rights are protected, and increases only if they were firmly promised.
Limits of insolvency protection for company pensions in Germany, 2026.
Example
Typical range
Highest regular payment
EUR 11,865 a month
Highest protected lump sum
EUR 1,423,800
Arrears paid
up to 12 months before payments start
Payments resume
usually within up to 3 months
Contact the fund if you hear nothing
after 6 months
Figures under § 7 of the company pension act with the 2026 reference value of EUR 3,955 and
information from the PSVaG.
Worked example
Pensioner with a direct promise, employer insolvent in March 2026
Example figures: the company pension is EUR 650 a month, the last payment came in January.
Insolvency proceedings opened
March 2026
Fund liable from
April 2026
Arrears for February and March
EUR 1,300, paid later
Below the maximum?
yes, EUR 650 fully protected
The pensioner keeps receiving EUR 650 a month plus the arrears. Future increases only come if they were firmly promised.
Who pays the company pension in an insolvency
If insolvency proceedings are opened against your employer, the PSVaG steps in for the company pension. It is the statutory insolvency fund for company pensions in Germany and pays pensioners and future pensioners what the employer owes, up to a maximum.
An application for insolvency is not enough. Only the opening by the court or a rejection for lack of assets triggers payment. A plant closure or an employer simply refusing to pay is not a case for the fund.
What applies to each pension route
How well your company pension is protected in an insolvency depends on how it is run.
Pension route
Protection in insolvency
Direct promise (Direktzusage)
PSVaG
Support fund (Unterstützungskasse)
PSVaG
Pension fund (Pensionsfonds)
PSVaG, where the fund does not pay
Pensionskasse
PSVaG, unless the Pensionskasse belongs to a protection fund or is a joint collective bargaining institution
Direct insurance, irrevocable beneficiary
contract sits with the insurer, the insolvency does not reach it
Direct insurance, revocable or pledged
PSVaG
Limits of insolvency protection
The PSVaG pays at most three times the monthly reference value, EUR 11,865 a month in 2026. For lump sums, ten percent counts as the yearly pension, so up to EUR 1,423,800 is protected.
Future pensioners are only protected where their company pension is vested. The fund only pays increases if the employer firmly promised them regardless of the business situation, or if the pension comes from salary conversion. A cut for early retirement stays in place.
What you have to do in an insolvency
Usually nothing. The insolvency administrator or employer must report names, addresses and claim amounts to the fund. You receive an interim notice. If you have heard nothing six months after proceedings opened, contact the fund yourself.
Pensioners usually get their company pension again within up to three months after the insolvency, arrears are paid later. Future pensioners receive a statement of their right and apply in writing, informally, when they retire, quoting their number.
Step by step
Find out how your company pension is run.
With a direct insurance, check the beneficiary type in the policy.
Keep the pension promise and payslips.
If six months pass without news, write to the PSVaG.
As a future pensioner, apply to the fund when you retire.
Checklist
Pension route known
Vesting reached
Direct insurance beneficiary irrevocable
Written promise of pension increases kept
Statement from the fund kept safe
Common mistakes
Expecting the fund to pay as soon as insolvency is applied for
Thinking a cut for early retirement is temporary
Not getting in touch after six months without news
Losing the fund's statement of your right
Questions and answers
Frequently asked
Is my direct insurance safe if my employer goes bankrupt?
With an irrevocable beneficiary yes, the money is with the insurer.
If it is revocable or pledged, the PSVaG steps in.
Do I have to register with the PSVaG myself?
Usually not, the insolvency administrator reports you.
If you hear nothing six months after proceedings open, get in touch yourself.
What about pension rights that are not yet vested?
They are not protected.
With salary conversion this is rarely an issue, because those rights vest immediately.
Does the fund pay widow's pensions too?
Yes.
Old age, invalidity and survivor benefits are protected.
Will my company pension still increase after the insolvency?
Only if the employer had firmly promised increases or the pension comes from salary conversion.
What if the Pensionskasse itself is in trouble?
If it belongs to a protection fund, that fund is responsible.
Otherwise the PSVaG covers what the employer promised.
