Working despite retirement: How to continue working after retirement

Demographic change and the ongoing shortage of skilled labour mean that more and more employees want to continue working after retirement. For companies, the so-called Active pension the opportunity to keep experience and expertise in the company for longer.

In legal terms, this is not an independent legal model, but rather the Continued employment of an employee after commencement of retirement pension. The decisive factor is the specific terms of the employment contract.

What is the active pension?

An active pension is defined as the continuation or resumption of gainful employment after entry into the statutory retirement pension.

Important:

• The employment relationship does not end automatically when the pension begins.
• The decisive factor is whether an effective age limit regulation has been agreed in the employment contract.
• Without a corresponding clause, the employment relationship continues in principle.

If an age limit has been agreed, the termination date can be postponed by mutual agreement or a new employment contract can be concluded.

Special features apply under social security law: Recipients of a standard old-age pension are regularly exempt from contributions to unemployment insurance; under certain conditions, they can continue to pay into pension insurance on a voluntary basis.

Why is the active pension interesting for companies?

The active pension is not purely a social issue, but a strategic instrument of personnel planning.

Securing expertise

Experienced employees have Established customer relationships, internal process expertise andindustry-specific expertise.

An abrupt departure can cause a loss of knowledge.

Flexible personnel management

The continued employment can:

• project-related,
• limited in time,
• part-time,
• as a transition to succession planning

be designed. As a result, companies gain time flexibility.

Contract models for the active pension

The specific structure depends largely on the previous contractual situation.

Extension with existing age limit

If the employment contract contains an effective age limit clause, the date of termination can be postponed by agreement before expiry.

Important:

• Timely conclusion of the extension agreement
• Clear documentation
• Clear time regulation

Multiple extensions are generally possible.

Conclusion of a new employment contract

Alternatively, a new, often fixed-term employment contract can be concluded after termination.

Typical adjustments concern:

• Reduction in working hours
• Project-related tasks
• Modified remuneration structure
• Shortened cancellation periods

One Careful structuring of time limits is necessary to avoid legal vulnerability.

Legal stumbling blocks for employers

The active pension is legally easy to handle - but has typical sources of error:

Observe protection against dismissal

Employees on an active pension are also subject to general protection against dismissal, provided the company is of a suitable size.

Continued employment „on call“ without a clear contractual basis can trigger conflicts later on.

Discrimination law

Unequal treatment based solely on age may violate the General Equal Treatment Act (AGG). Decisions on continued employment should be objectively justified.

Special features under social security law

Contribution obligations change with the start of the pension. Incorrect accounting can lead to additional claims or audit risks.

Coordination with payroll accounting or tax advice is recommended.

By the way:

You can find out everything you need to know about the minimum wage in 2026 in this blog post:

New mini-job limit & obligations for employers

Conclusion

The active pension offers companies a pragmatic possibility, to retain expertise in the company and to flexibly bridge staff shortages. However, this requires a clear employment contract and compliance with labour and social security legislation.

With a structured preparation can be used to continue working after retirement in a legally secure and economically sensible manner.

If you have any questions on this or other topics, please contact us - we will be happy to advise you.

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