Capital formation benefits
Money from the employer
Capital-formation benefits ('Vermögenswirksame Leistungen'; VL) are savings amounts that the employer invests for the employee. Employers often pay some or all of the capital-forming benefits in addition to their salaries.
State support with the employee savings allowance
The state promotes VL savings in investment funds by way of the employee savings bonus. It is paid to singles with a taxable income of up to EUR 40,000 and to those assessed together with a taxable income of up to EUR 80,000. A VL depot is subsidised up to an annual savings amount of EUR 400 or 800. The state allowance is 20 percent, i.e. up to EUR 80 or 160 per year. The employee savings allowance must be applied for at the relevant tax office in the income tax return.
Deadlines for VL contracts
VL contracts must be saved for six years. If the saver has made use of the employee savings bonus, it is fixed for another year. After the seventh year, the so-called blocking period, the saver can have access to the entire sum of deposits, income and the employee savings bonus.
List of actively offered VL funds
Here you will find investment funds in which capital formation benefits can be invested:
On the performance of VL savings plans in equity funds with an investment focus on Germany