GERMANY - The union for the service sector in Germany, ver.di, has called on the government to create more funded elements for securing retirement provision for future civil servants.
It recommended the creation of so-called Versorgungsfonds, which have already been set up in some provinces, but with some differences.
As those funds have drawn criticism lately for having been suspended for economic reasons, the union wants any such vehicle to be set up as a separate entity.
An "independent, cross-regional body" - such as an independent public law institution - should manage the scheme, as opposed to a regional governmental department.
"This way," the union noted in a paper on the future of civil servants' retirement provision, "the earmarked funds will be effectively protected from the grasp of politicians".
The union also said it might make sense to pool the funded elements across regions.
As a possible model, ver.di named the VBL (Versorgungsanstalt des Bundes und der Länder), which manages civil servants' supplementary pensions.
However, it noted that currently existing schemes being funded for active civil servants should not receive any money for the time being because of the difficult budgetary situation for most provinces.
Instead, funds for new entrants should be established, as they can be started off with a lower level of funding.
Ver.di warned against outsourcing administration of the funds to "asset managers, pension management companies, banks or independent financial advisers", and called for allocating funds to risk-free, long-term investments.
"If large sums of money were to be pooled with private insurers, this would throw doors wide open for speculators and dubious investors," it said.
The suggestions were made for civil servants on a provincial and federal level, as ver.di pointed out that many municipalities already have such schemes in place.
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