The German Federation of Chemical Employers’ Associations (BAVC) has received approval to start the first industry-wide social partner model for occupational pensions in the chemical sector with the trade union IGBCE.
The German financial supervisory authority, BaFin, has given the green light to ChemiePensionsfonds (CPF) of the R+V Versicherung – one of the largest insurers in Germany – to offer pure defined contribution (DC) pension plans under the social partner occupational pension model, the BAVC said in a statement.
BAVC’s managing director Klaus-Peter Stiller said the approval of the social partner model in the chemical industry by BaFin marks “a new era” for company pension schemes.
“We are very pleased to be the first industry in Germany to offer pure defined contribution plans. This milestone makes the second pillar attractive and future-proof for both companies and employees,” he said, adding that the social partners will start providing the new pension plans this year.
The ChemiePensionsfonds will diversify the allocation of pension assets by investing in equity indices, looking into MSCI World and Euro Stoxx 600, while also investing in government and corporate bonds, the social partners said.
The portfolio’s equity allocation will vary depending on market conditions, swinging between a minimum of 10% to a maximum of 80%, they added.
The ChemiePensionsfonds has more than 120,000 members, and assets under management totalling close to €1.1bn, with annual contributions reaching €90m.
Pure DC plans – or raine Beitragszusage – are allowed under the law to strengthen occupational pensions – Betriebsrentenstärkungsgesetz – following the signing of collective bargaining agreements by the social partners representing employers and employees.
BAVC and IGBCE had planned to design rules for a collective bargaining agreement to start a pure DC scheme for new pension promises for employees by the end of June to start the new pension model in October.
Earlier this year a first draft of the new pension model was sent to BaFin, Michael Mostert, the representative of the IGBCE, said at the annual meeting of the occupational pension association Aba in Berlin in May.
Ralf Sikorski, deputy chair of IGBCE, said: “With the social partner model, we can continue to offer attractive old-age provision for our members in the future, despite the fact that framework conditions have changed.”
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