German association of professionals consults on new DC pensions model

The German federal association of professionals – Bundesverband der Freien Berufe e. V. (BFB) – the organisation representing the interests of professional associations, has started a consultation with its members to design the social partner model FachkräfteRente.

The consultation could lead to the draft of a new framework for pure defined contribution (DC) company pension schemes for professionals working in the medical, legal, consulting, cultural or scientific professions, among others.

The consultation will result in a decision to be taken by the professional associations part of BFB on the new social partner model at the annual general meeting (AGM) of the umbrella organization in June, it said.

The social partners involved in the process to sign the agreement for the new DC scheme are the working group regulating the working conditions of the pension schemes for medical assistants (Arbeitsgemeinschaft zur Regelung der Arbeitsbedingungen der Arzthelferinnen/Medizinischen Fachangestellten, AAA), dental specialists (AAZ) and the association of practicing veterinarians e.V. (BPT), on the side of the employers, and the Association of Medical Professionals (Verband medizinischer Fachberufe) for the employees.

Professionals who are not bound by collective bargaining agreements, including those from other professions, can join the social partner model negotiated by the medical associations.

This would not result in a new collective bargaining agreement, and the employer can terminate the contract at any time, it added.

The FachkräfteRente would not overlap with existing company pension schemes, instead being an additional offer for supplementary old-age provisions. Professionals would have the option to voluntarily sign up to a pure DC offering and this, according to BFB, would attract skilled workers.

Striving for independence

A social partner model for professional organisations could look different from the classic forms of agreements signed between the representative of employers and employees, for example at Uniper and in the chemical industry.

Therefore, the Federal Ministry of Labour and Social Affairs (BMAS), which supports the project for a new pension model for professionals, will relax the rules this year, so that all types of professions can refer to a uniform, common model for occupational pensions, BFB said.

Professional organisations would prefer a legal framework giving them the freedom to self-run and organise a new architecture providing supplementary pensions, opposing the idea of an auto-enrollment in the social partner pension model, set by law, it added.

Under the new pension model professionals would not be dependant from third parties, as is the case when a life insurance company runs a pension scheme, and would not buy a pension product from a provider active in the financial industry, according to BFB.

BFB will set up an administrative office with experts to implement and monitor the social partner model FachkräfteRente on behalf of the professional association. Employers will pay a monthly contribution of €15, on top of €1 per member, to run the pension scheme.

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