GERMANY - Communication is essential if the German occupational pensions market is to truly develop - this is the consensus of the delegates at the PensMart fifth annual European Pensions Market Forum 2003 in Frankfurt today.

German companies are not investing enough in communicating to their employees about pensions products and opportunities which will hamper the growth of the second pillar pensions market, says Boy-Juergen Andresen, chief executive and managing director of consultants, Dr Heissmann.

There is no point having products if no one understands them, he argues, and only those companies that realise this and focus on the issue will be effective in establishing a successful second pillar system for their employees.

Going forward, the role of human resources will be key. Harald Huhn, managing director of Gerling Pensionsmanagement, agrees. "There is research that shows take-up rates to be higher when the HR is good." However, points out Huhn, the HR manager cannot work alone. The question of pensions provision and products must be looked from both a finance perspective and an HR perspective.

The complexity of the various pensions products within the second pillar in Germany has been the subject of much criticism. Market participants argue that with too much choice and depth of detail of the products is discouraging take-up.

Huhn argues, however, that is not the case. "The fact is that the majority of Germans have just not understood that the first pillar system will no longer deliver 100%. They do not realise that they need to save." Huhn believes this will change over time, and points out that the younger generation is aware and will drive forward the second pillar.

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