OBTAINER - QNET

are self-employed will be required to commit to a mandatory
requirement plan," according to BMAS. The new law which is
to be brought into existence shall have the lengthy name of:
"Old Age Pension Insurance Payment Adaptation Law" and is
currently in the consultation phase. The conjecture that it will
already take effect in January 2013 could not be confirmed by the
Advisor of the federal pension system or the BMAS. In addition,
it was stated that the format of the future mandatory pension
insurance for self-employed individuals has not been finalized
and is, as before, still being discussed.
The core of the reform is that self-employed individuals who
belong to professional groups for which currently there is no
pension obligation will be required to provide for their old age.
It must be noted, however, that many autonomous professionals
groups have been paying for many years compulsory statutory
old age insurance dues for self-employed individuals; this
includes, for example: craftsmen, teachers, tutors, caretakers
of children and many others as long as they have been working
for a client and did not employ any individuals who have old
age pension security obligations. The official reason for this is
that these self-employed individuals - when the aforementioned
conditions are met - are then classified as "employee-like selfemployed"
individuals. In addition, there are other occupational
groups which have had to insure themselves, in various different
forms, with regard to statutory old age pensions: these include
artists, writers as well as doctors, lawyers, architects and farmers
etc.; all of the above are subject to mandatory professional and
occupational contributions. Interesting, for the distributor, is also
the following fact: In accordance with a judgment by the Federal
Social Court in 2009, there is a mandatory insurance obligation
for distributors who work only for one client in existence. A
distributor who offers the products of a MLM-enterprise is
therefore, already since 2009, obligated to pay contributions for
the required statutory pension.
But what about contribution payments if a general mandatory
pension requirement takes effect? The above-mentioned
fixed contribution in the amount € 400.00 per month for the
statutory pension insurance is not guaranteed and is based
on speculation. It is much more probable that self-employed
income dependent contributions will apply with regard to
payments to be made for one’s retirement! In addition, the
fact sheet of the BMAS says: "The obligation for pension
contributions will apply up to a basic insurance limit." This
means that self-employed compulsory contributions are to
pay for a basic existence in old age and, therefore, will likely
require a smaller contribution than those employees whose old
age payments generally exceed the minimum requirements. In
addition, self-employed individuals that are near retirement
BACKGROUND
(those over 50) as well as those with sideline jobs or those
earning less than € 400.00 per month will be exempt from the
required mandatory contributions. For those that are already
self-employed and are between the age of 30 and 50 and have
made provisions for their retirement, there are exception and
exemption regulations; however, if "start-up businesses [...]
through their flexible contribution payment opportunities [...]
have sufficiently contributed" remains to be seen.
At this point one aspect should once more be clearly emphasized:
It is NOT intended that all self-employed individuals will be
required to participate in the statutory pension insurance
program in the future. There continues to be a choice between
statutory and private pension plans. The restriction that the
chosen plan for the old age pension will be paid out as a pension
payment is serious;- because capital investments and real estate
investments are not recognized as retirement options.
The planned mandatory pension insurance for self-employed will
not pass by without affecting the MLM industry; this is because
even if there is a relatively large leeway in terms of contributions
to be paid and that there are various forms of retirement savings
available, retirement planning, in the future, must be made by the
self-employed themselves. A distributor, who earns an additional
€ 500.00 or € 1,000 a month, will also have significant additional
expenses and this will, possibly, keep interested parties from
choosing to become self-employed on a part time basis within
the industry. The result would be, in some circumstances, losing
current distributors who only want to obtain a supplementary
income as well as the loss of new potential distributors who are
only interested in MLM as a sideline; therefore, such a type of selfemployment
would then lose its attractiveness and lucrativeness
due to the pension reform.
In conclusion, we from OBTAINER would like to give you, our
readers, the following advice: It cannot currently be determined,
with certainty, in which form and in what time-frame the
mandatory pension insurance obligation for self-employed
individuals will be introduced or what type of exemption
regulations there will be; furthermore many of the concepts are
not yet clear and without further explanation it will be best to
keep in touch with the German Pension Insurance Association
about the details of these potential future obligations with regard
to the pension insurance obligations and their structure.
Of course, we'll keep you up to date with regard to the subject of
"mandatory pension insurance for the self-employed".
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