# German pension accounts at Upvest

This guide outlines the integration for German pension accounts beginning with the Altersvorsorgedepot (AVD) and the Standarddepot.

## Before you begin

Before starting, we want to explain the following terms and phrases related to the pension accounts.

| **Key Terms** | **Description** |
|  --- | --- |
| **Tax wrapper** | The Upvest entity that contains all information and configurations related to the pension account. The tax wrapper entity is linked to the corresponding account group. |
| **Allowances** | The Upvest entity that tracks the amount a user contributes into the pension account. A new allowance is created each year. |
| **Contributions** | The amount the user contributes to the pension account. Currently the government allows up to €6,840 annually in each pension account. |
| **Government bonus(*Zulagen*)** | The proportionate cash bonus granted by the government based on individual contributions to the pension account (or fixed amount in the Frühstart-Rente). |
| **Bonus permission** | The permission granted from the user to apply for the bonus on their behalf. This is needed to receive government bonus payments.The permission can either be **permanent** (*Dauerzulageantrag*) and last until revoked or **annual** and must be renewed each year. |


## German pensions at-a-glance

The German pension products - **Altersvorsorgedepot**, **Standarddepot**, and **Frühstart-Rente** - are tax-advantaged savings and investment accounts introduced as part of a broader pension reform.

This guide focuses on the **Altersvorsorgedepot** and **Standarddepot** pension account. They are designed for adults who are residents of Germany and saving for retirement. They provide the following benefits for end users:

- **Pension accounts**: Up to two pension accounts per user, with a contribution limit of €6,840 per year for each.
- **Government bonuses**: Individuals receive an annual bonus payment proportional to the users’ contributions plus additional child and young adult bonuses.
- **Tax exemption**: Investments grow free of capital gains tax during the accumulation phase and are only taxed when paid out as regular income.
- **Transfers** between Altersvorsorgedepot/Standarddepot or from existing Riester contracts - the currently available private pension account - into an Altersvorsorgedepot/Standarddepot are possible.


The **Frühstart-Rente** is a tax-advantaged pension account for children and adolescents between the ages of 6 to 18. Users receive monthly government bonus payments of €10 and can optionally add private contributions. Frühstart-Rente accounts automatically convert into an Altersvorsorgedepot or Standarddepot when the child turns 18 years old. More information will be available in the Frühstart-Rente guide.

## Government bonus (*Zulagen*)

Both the Altersvorsorgedepot and Standarddepot are eligible for government bonus payments (*Zulagen*). Bonus amounts are calculated based on the contributions made within the respective tax year and are credited directly to the investment account. The bonus applies at the user level, not on an individual account level.

- **Individual bonus**: The government provides an annual bonus of up to €540, calculated via a tiered subsidy model, including 50% on the first €360 contributed and 25% on contributions between €361 and €1,800. Users must contribute a minimum of €120 per year to be eligible for the bonus.
- **Child bonus**: Users can apply for an additional annual government bonus payment paid into the parent’s pension account. Currently this equals up to €300 for each eligible child.
- **Young adult bonus**: Additional one-time government bonus of €200 for qualifying young adults aged 18-25 years old.


Users must apply - either directly or through their provider - to the **Zentrale Zulagenstelle für Altersvermögen (ZfA)** to receive the government bonuses. After applying, the ZfA confirms the bonus eligibility and calculates the respective amount on a yearly basis. The Investment API provides the endpoints for you to submit the user’s application and webhooks to monitor and track the application’s status.

See the [Applying for the government bonus](/products/tol/guides/tax_wrappers/german_pensions_bonus_application) section for more information on applying for the government bonus.

## Our solution for German pensions

Upvest makes it easy for you to manage the German pension process. We provide the following endpoints to help provide a state-of-the-art pension product for your users.

| **Functionality** | **Related Endpoint** |
|  --- | --- |
| **User management** | We provide all the required fields in our **/users** API to onboard users into the system including tax residency verification. |
| **Tax wrappers** | The **/de_pension/wrappers** endpoint manages the configuration, business rules and logic for tax-advantaged accounts including Altersvorsorgedepot and Standarddepot. |
| **Account groups and accounts** | Use the **/account_groups** and **/accounts** endpoints to open and administer accounts linked to the tax wrapper. |
| **Allowance tracking** | The **/allowances** endpoint tracks the user’s contribution and verifies that the user meets the minimum and maximum contribution amounts. |
| **Bonus application permission** | You can use the **/bonus_permissions** endpoint to store the end user’s permission details that allows Upvest to apply for government bonuses on behalf of the end user. This entity also allows you to add any additional details about associated individuals needed for the bonus application such as spouse and children.  This can be stored once (or edited) and used for all future bonus applications. |
| **Bonus application** | Upvest can manage the annual application process and you can use both the **/bonus_applications** endpoint and webhook to track the entire application process and to query data on historical applications. The webhook will also notify of any missing information from the application in advance of submission to the Zentrale Zulagenstelle für Altersvermögen (ZfA). |