GERMANY - Pension funds for the self-employed have been given fresh support by the German government in a fight against dissolution plans put forward by unions and left-wing parties.

So-called "berufsständische Versorgungswerke", which are part of the first-pillar pension provision in Germany, are "fit for the future" because of their structure as funded retirement plans, said Andreas Storm, minister with the conservative government coalition party CDU.

"The CDU is behind the concept of the Versorgungswerke as independent retirement provision vehicles and will defend this independence," he noted at the 50th anniversary of the Versorgungswerk for veterinarians in the German province of Hessen.

The association of Versorgungswerke sees this as "significant political support for independence of the system", a spokesman explained to IPE.

Many groups of self-employed people such as lawyers, doctors and pharmacists already have regional funds into which they pay towards retirement provision because  they were not historically integrated into the general PAYG state pension plan.

However, some unions as well as the left-wing party "Die Linke" have recently demanded all self-employed people be included in the state pension system - both those who are paying in one of the Versorgungswerke and those who are not - in order to ensure balance in the system and "re-establish social fairness" by obliging everyone to contribute.

The Versorgungswerke has pointed out they currently ensure sufficient retirement provision for all its members without state support, noted the spokesman.

At the same time, he added forcing members of Versorgungswerke into the state system would be considered unconstitutional.

The conservative half of the government as well as the right-of-centre FDP party have now vowed to fight for the existence of the Versorgungswerke, many of which are among the largest pension funds in Germany.

"It does not make sense to destroy a system like the Versorgungswerke which manage to solve demographic problems on their own," suggestedDaniel Bahr, member of parliament for the FDP.

In his speech, Storm also noted such an inclusion would not make sense as the average life-expectancy of the self-employed is currently higher than that of employed people and including them into the state pension plan would therefore only be a further burden on the system.

He only wants to include self-employed people who do not currently have the possibility of paying into one of the first-pillar funds because there is none aimed at their profession.

The Versorgungswerke have also come under fire in recent months from left-wing parties for arguing the European Courts of Justice's decision against discrimination of same-sex partnerships when paying out pensions does not apply to them.

The Versorgungswerke noted the ECJ decision specifically stated it did not apply to state first-pillar pension insurance systems, of which the Versorgungswerke in Germany are a part, but only to occupational pension provision.

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com

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