Pensionskassen and Pensionsfonds, two vehicles to offer occupational pensions in Germany, are increasingly outsourcing functions as they see the effects of the lack of skilled workers, among others, in their asset and risk management divisions.
Close to 97% of Pensionskassen and Pensionsfonds surveyed by the financial supervisory authority BaFin have already completely or partially outsourced functions.
For occupational pension schemes that have not yet carried out a spin-off (3%) or have only carried out a partial spin-off (39%), the use of third-party service providers is likely to become even more important in the future, BaFin said in its study.
Germany’s financial supervisory authority conducted a study on the shortage of skilled workers in 124 Pensionskassen and 34 Pensionsfonds, together with the occupational pension association aba.
Questions sent to the pension schemes focused on laying bare efforts to replace employees in the past three to five years, and over the next three years.
BaFin investigated the reasons it has been difficult to replace employees in occupational pension schemes, differentiating between central functions – boards of directors, supervisory boards and other key functions — and individual business areas, it said.
At least in the near future, company pension schemes in Germany do not expect problems when filling positions at management or supervisory boards level, or key functions, according to BaFin’s study. Instead, almost every second occupational pension fund expects to encounter difficulties in recruiting personnel to replace its own staff until 2026, it added.
In this case, asset and risk management, but also departments specialising in processing employees’ benefits, and inventory management, are particularly affected by a lack of skilled workers, BaFin said.
There is a risk that IORPs will not be able to meet the regulatory requirements due to inadequate staffing levels, especially in the area of IT, it added.
Company pension schemes are considering methods for employee retention while working to improve employee qualifications, and deploying automation processes to fill positions. according to the regulator.
Occupational pension schemes will likely have to hire workers to deal with an increasingly challenging regulatory and economic environment, competing with banks, insurers and investment companies for skilled workers.
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