Concept and definition of foreign pensions
Foreign pensions represent a specific area of German pension law and are particularly to be considered in connection with the Foreign Pensions Act (FRG). The term “foreign pension” refers to pension entitlements acquired by German nationals or equivalent groups of people by carrying out employment subject to social security contributions outside the territory of the Federal Republic but within the sphere of influence of the German Reich or in certain neighboring countries. In other words, foreign pensions are pensions based on insurance periods that were not completed in the Federal Republic of Germany itself, but often in former German eastern territories, later Eastern Bloc states, or countries where German minorities lived.
The legal basis is the Act on the Payment of Social Security Benefits to Germans and persons of equal status living abroad (Fremdrentengesetz, FRG) of February 25, 1957. The aim of the law was to provide people who migrated to Germany from areas or states restricted for political or war-related reasons, particularly resettlers and refugees, with social compensation for lost pension entitlements.
Overview of legal regulations
Foreign Pensions Act (FRG)
The Foreign Pensions Act regulates the recognition of periods of work and compulsory insurance acquired abroad for the statutory pension insurance in Germany. The FRG is an integral part of the German Social Code (SGB) VI. It gives certain groups of eligible persons the opportunity to have insurance periods brought from abroad recognized in the German pension insurance as if they had been acquired domestically.
Eligible group of beneficiaries
The eligible persons include in particular:
- German expellees,
- Late repatriates in accordance with the Federal Expellees Act,
- Refugees and displaced persons,
- ethnic German repatriates from the former eastern territories, parts of Eastern Europe, or the Soviet Union,
- equivalent non-German spouses, descendants, and certain relatives of persons persecuted for political reasons.
Decisive for recognition is the status according to the Federal Expellees Act, proof of German ethnicity, as well as evidence of employment periods and insurance periods in the country of origin.
Creditable periods
Creditable are employment and insurance periods that have demonstrably been completed abroad and must generally be comparable to German compulsory insurance periods. These include periods of work as an employee, but under certain conditions also periods of self-employment or childcare.
In order for a period to be creditable, it must generally have been completed in states that were part of the German Reich as of December 31, 1937, or in territories located outside this area for which the FRG provides for recognition.
Amount of the foreign pension
The amount of the foreign pension is determined by the pension entitlements acquired abroad and is awarded on the basis of notional contribution assessments. The law stipulates standardized values for the assessment of foreign contribution periods, so that average earnings and contribution periods are generally determined as lump sums. However, the foreign pension may be limited – depending on the time of application and individual factors such as the immigration date into the Federal territory – by statutory capping and reduction regulations.
Over the years, the assessment rates have been adjusted by law several times, in particular through legal changes from 1996 onwards, which led to significant reductions in foreign pension entitlements (“capping regulation”).
Requirements and evidence for recognition
Application and submission of evidence
To assert foreign pension entitlements, an application must be submitted to the German Pension Insurance. The applicant must provide evidence of all facts relevant for recognition, in particular:
- Proof of German citizenship or status as a late repatriate,
- Proof of expulsion, resettlement or flight,
- precise documentation of foreign insurance periods, for example by work records, insurance certificates, testimonials, or comparable credible documentation.
In many cases, proving the required facts is made more difficult by loss or destruction of the original documents. The FRG therefore provides special relief and means of evidence, such as statutory declarations or witnesses.
Legal particularities and deadlines
With the Pension Reform Act of 1992 and subsequent amendments, fundamental changes were introduced, especially for late repatriates who immigrated after January 1, 1993. These mainly affect the assessment criteria and significantly restrict access to foreign pensions. For some groups, key-date regulations, application deadlines, and special requirements for evidence must be observed.
Legal effects and particularities
Equal treatment and payment of pensions
By recognizing foreign pension periods, eligible applicants are generally treated as equivalent to domestic insured persons within the German pension system. The foreign insurance periods are treated as if they had been acquired in the statutory pension insurance system of the Federal Republic of Germany.
Relation to the European Union and bilateral agreements
Foreign pensions differ from pension entitlements recognized under intergovernmental social security agreements (e.g., social security agreements) or as a result of EU regulations on social security (e.g., Regulation (EC) No. 883/2004). While bilateral agreements or EU rules provide for the coordination of the respective national social security systems, foreign pension benefits are stand-alone notional entitlements outside transnational insurance periods.
Reduction rules and scope of benefits
Through various legislative reforms, the scope of foreign pension benefits has particularly been restricted for newcomers or late repatriates from Eastern European countries. A central provision here is the so-called “capping” (§ 22 FRG), which limits the value of recognized foreign insurance periods and provides for significantly lower foreign pension entitlements for arrivals after January 1993.
In addition, the SGB VI and the Foreign Pensions Act contain further regulations on waiting and exclusion periods, recognition modalities as well as payment abroad or exclusion of benefits in the case of certain places of residence abroad.
Current significance and reform discussions
The social and political significance of foreign pensions has changed, especially since the turn of the millennium. Due to the influx of large numbers of late repatriates (mainly from the former Soviet Union), considerable burdens and political discussions arose regarding the scope of benefits, evidentiary requirements, and the focus on integration into the German social security system.
Reform proposals mainly concern the fair determination of entitlements as well as ensuring that equal treatment with domestic contributors is maintained, without providing excessive incentives for emigration or immigration.
Literature and sources
- Act on the Payment of Social Security Benefits to Germans and Persons of Equal Status Living Abroad (Fremdrentengesetz – FRG)
- Social Code Book Six (SGB VI) – Statutory Pension Insurance
- Federal Expellees Act (BVFG)
- Döring, Foreign Pension Law – Commentary on the Foreign Pensions Act
- German Pension Insurance: www.deutsche-rentenversicherung.de
Note: This article provides a detailed overview of the concept and legal requirements of the foreign pension. For individual claims and procedural steps, it is recommended to contact the relevant pension insurance carriers.
Frequently Asked Questions
What legal requirements must be met for the recognition of foreign pension periods?
For the recognition of foreign pension periods, various legal requirements under the Foreign Pensions Act (FRG) must be fulfilled. Firstly, the person concerned must be a displaced person, refugee, late repatriate or their relative and have moved their permanent residence to the territory of the Federal Republic of Germany before January 1, 1993. In addition, it is required that periods of a pension-relevant insurance relationship or employment outside the Federal Republic of Germany, such as in the former German eastern territories or in countries of the former Eastern Bloc, have been completed. In addition, proof must be provided by suitable certificates and documents, whereby, in cases of doubt, the periods may also be accepted on the basis of credible evidence. It must also be established that the activity or insurance-relevant period in the country of origin is actually comparable to German pension law, which also includes so-called equivalence checks. The legal requirements are provided in the FRG with numerous exclusion and special regulations, particularly with regard to certain groups of persons, as well as concerning political loyalty towards the Federal Republic of Germany or to prevent double benefits from foreign and German pension systems.
How is the legal examination and recognition of foreign pension periods carried out by the pension provider?
The examination and recognition of foreign pension periods is carried out by the responsible pension insurance provider as part of an administrative procedure. The applicant must present all necessary documents to the pension insurance institution, such as evidence of employment, training, self-employment, or periods subject to compulsory insurance in the country of origin. The pension insurance checks the documents for authenticity, completeness, and compliance with the legal requirements of the Foreign Pensions Act. Often, an individual case examination takes place, in which supplementary hearings or credible statements are permitted if official documents are missing, especially due to war or flight circumstances. The pension provider also considers international agreements that may facilitate or prevent recognition and checks on the basis of legal regulations whether specific exclusion criteria apply, such as double payments due to foreign pension entitlements. The legally enforceable decision is communicated to the applicant by notification; in the case of rejections, appeals and actions before the social court may be lodged.
What are the grounds for exclusion in the legal context for foreign pension periods?
Within the framework of the Foreign Pensions Act, various grounds for exclusion are regulated under which there is no entitlement to recognition of foreign pension periods. These include, in particular, pension entitlements already granted or paid in the country of origin for the same periods, so that double benefits are excluded. Also excluded are periods completed after resettlement in the Federal Republic of Germany as well as employment not carried out under conditions subject to compulsory social security. The Foreign Pensions Act also provides that persons who have been found guilty of serious misconduct – such as supporting totalitarian systems or antisemitic activities during the time in the country of origin – may also be excluded from crediting. These exclusion criteria are specified in detail in the articles of the law and are specifically checked by the pension insurance providers as part of the application review.
How does a pension already granted abroad legally affect the foreign pension entitlement?
If a person has already been granted or paid a pension abroad for the same periods, the legal situation is clear: The entitlement to have these periods credited under the Foreign Pensions Act lapses or is accordingly reduced. The aim is to avoid what is known as a “double pension”. During the application and review process, there is an explicit query regarding existing or applied-for pension entitlements from the country of origin. If the pension entitlement abroad is subsequently established, it is possible to review and, if necessary, reclaim or adjust the German pension benefit. In some cases, however, it is possible to offset or recognize entitlements within the framework of bilateral social security agreements, provided this is explicitly regulated. The legal provisions on this can be found in the relevant sections of the Foreign Pensions Act and serve to ensure that state benefits are not received twice.
What legal deadlines must be observed when applying for recognition of foreign pension periods?
The application for recognition of foreign pension periods is not subject to fixed legal exclusion deadlines; it can, as a rule, even be submitted after the pension has begun. However, the time of application affects the amount of the pension and the start of payments. If an application is submitted late, pension payments usually begin only from the month following the application and not retroactively. In addition, certain deadlines for submitting proof must be observed, particularly if the pension insurance provider requests additional documents. To safeguard the legal entitlement, it is advisable to submit the application early and completely, provided all required evidence is available, as obtaining documents from abroad can be very time-consuming. In the event of a rejection, an appeal may be lodged within one month of notification of the decision and, if the disagreement continues, an action may be filed with the social court.
What are the legal consequences of incorrect or false statements when applying for a foreign pension?
Incorrect information in the application for a foreign pension is prosecuted as an administrative offense or criminal act, depending on the severity of the offense. If grossly negligent or intentional false statements are made that lead to unlawful pension payments, the Social Code provides for penalties up to imprisonment or severe fines. In addition, the pension insurance provider is entitled to reclaim wrongly received benefits by means of a recovery order, whereby the repayment obligation may also pass to the heirs. The pension insurance provider is obliged to review the information as part of the official investigation principle. Anyone who intentionally or negligently provides false information therefore exposes themselves to considerable legal and financial risks.
Which legal remedies are available against a decision refusing the recognition of foreign pension periods?
The legal remedy against the refusal of an application for recognition of foreign pension periods is, in principle, the objection procedure. After receipt of the negative administrative decision, the applicant may lodge an objection in writing or by recording at the issuing institution within one month. The objection is decided by the opposition office of the pension insurance provider. If the objection is not granted, it is possible to take legal action before the competent social court. In the social court proceedings as well, compliance with the legal requirements and the correct application of the statutory provisions is thoroughly reviewed. Legal protection may be ensured, if applicable, by assigning a Rechtsanwalt or through advocacy associations such as the Sozialverband Deutschland. In special cases, an appeal can also be filed with the State Social Court and, ultimately, with the Federal Social Court.
