A quarter of German companies see the COVID-19 crisis as the right moment to make occupational pensions fit for the future, according to a survey conducted by Willis Towers Watson.

Some 26% of the firms surveyed stated their pension focus during the crisis was on redesigning occupational schemes for the future.

A further 23% of the respondents said their pension focus during the crisis was on continuing to support employees through company pension schemes.

However, one-third (34%) indicated occupational pensions were currently not a priority as other issues were more urgent. The survey was carried out at a recent WTW workplace pension conference in Germany and captured the views of pension professions at mostly small to medium-sized German companies.  

Heinke Conrads, head of retirement for Germany and Austria at Willis Towers Watson, said companies that had already done their “occupational pensions homework” could now concentrate on other topics.

“In recent years a large number of companies have reworked company pension schemes to make them risk-optimised. It is now paying off,” she added.

Occupational pension schemes face low interest rates, a complex set of requirements, and high levels of guarantees.

BaFin, the financial supervisory authority, decided at the peak of the first wave of the COVID-19 pandemic in April to relax rules requiring employers to restore the coverage of guarantee assets for Pensionsfonds. For Pensionskassen, it waived objections to a temporary passive excess of the proportion of real estate assets held through certain investments funds. 

“The concessions [granted] at the beginning of the crisis, for example legal or regulatory relief for reporting deadlines for company pension schemes, make sense but is far from sufficient,” Conrads said, adding that regulatory pressure on workplace pension schemes was significant already pre-COVID.

 

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