The Partial Retirement Act (Altersteilzeitgesetz, AtG) offers you as an employee the opportunity to reduce your working hours by half after reaching the age of 55.

Your employer can conclude an agreement on partial retirement with you on a voluntary basis. However, the employer may also be obliged to conclude an agreement on part-time work for older employees with you on the basis of a collective agreement, a company agreement or a corresponding church law regulation.

With the agreement on part-time work for older employees

• the previous weekly working time is reduced to half (either in a continuous model with half the working time throughout or as a block model with a full working phase and a leisure phase),
• employment subject to compulsory insurance continues, and
• the employer is obliged to make top-up payments to the partial retirement pay and pension insurance contributions for you.

The employer tops up the remuneration subject to social insurance contributions to be paid to you on a regular basis for partial retirement work (excluding one-off payments) by at least 20 percent and pays additional contributions to the statutory pension insurance for you. This ensures that you are covered by pension insurance at at least 90 percent of your previous pay. The top-up amounts to be paid by the employer on top of the part-time retirement pay and pension insurance contributions are tax-free and not subject to social insurance contributions.