GERMANY – The insurance industry has launched a new €500m insolvency protection fund which so-called ‘de-regulated’ Pensionskassen (traditional pension funds) may join on a voluntary basis.

De-regulated Pensionskassen are schemes that do not serve single companies but instead compete for pension business in all industries.

Unlike most other German pension funds, de-regulated Pensionskassen are not insured against insolvency via the Pensions-Sicherungs-Verein (PSV) or, in the case of ‘regulated’ Pensionskassen, via the companies they are tied to.

De-regulated Pensionskassen are, however, closely monitored by German financial services regulator BaFin. They are, for example, subjected to stringent stress tests.

With the emergence of the new fund, – to which insurance companies in Germany are legally obliged to contribute – the schemes also gain access to insolvency protection.

Administration of the fund, whose assets are to total €500m by 2009, is being handled by Protektor, a life insurer based in Mannheim.

Protektor said that so far, no de-regulated Pensionskassen had decided to join the fund. “But we just launched the fund this week and we will be getting in touch with the Pensionskassen and then see,” a spokeswoman told IPE.

Since several de-regulated Pensionskassen are owned by German life insurers, it is likely that the fund will resonate well with the schemes.

All told, de-regulated and regulated Pensionskassen account for one-fifth of the €381bn in corporate pension assets in Germany.

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