Flexible working hours are playing an increasingly important role in the economy. Working time accounts offer employers an additional staff management tool, and can also serve as substitutes for partial and early retirement schemes. From the employees’ standpoint, working time accounts offer attractive advantages for life and retirement planning, can help motivate staff and keep qualified staff loyal to the company.
The principle behind working time accounts couldn’t be simpler: employees pay time units and/or pay components into their accounts, out of current salary, bonuses, unused holiday allowances or overtime, for example. Assets are invested gross, that is, before deducting taxes and social security contributions. Employer and employee can agree to use the assets saved up to release the employee from work for a long period of time (long-term working time account) or for early retirement (lifetime working time account). Tax and contributions are deducted retrospectively, that is, when assets are paid out to the employee.
Your benefits at a glance:
- Active management of company age distribution
- Motivates and binds contributors
- Cost-effective alternative to partial retirement schemes
- Could replace expensive early retirement schemes