The German unions Ver.di and IGBCE, and the energy company Uniper, have started the first social partner pension model for occupational pensions, it was announced today.
The other social partners involved are the Employers’ Association of Energy and Water Management Companies (AVEW), and the Employers’ Association of Bavarian Energy Supply Companies (AGV Bayern).
The social partners have agreed on a collective bargaining agreement to implement pure defined contributions (DC) schemes for occupational pensions through the social partner model.
The provider of the first DC plan in Germany is Metzler Sozialpartner Pensionsfonds, the partners said in a statement, adding that Bankhaus Metzler bank and Uniper have been cooperating for six years.
The financial supervisory authority, BaFin, has approved the pure DC scheme called Metzler rBZ 1 pension plan on 27 September, IPE has learnt.
The social partners have agreed on the specific points of the collective bargaining agreement to provide the pure DC plan rBZ 1 in May, according to their statement.
Under the agreement, the employer pays a basic contribution of 2% of the gross annual salary, a matching contribution of one third of the basic contribution with regard to the employees’ contributions, a cost and security contribution totaling 7% of contributions made.
A security buffer is financed by the employer’s contribution to compensate for market fluctuations in the retirement phase, according to the note sent out by the social partners.
With deferred compensations, the employer pays a contribution of 15% of the deferred compensation, insofar as social security contributions are saved as a result of deferred compositions.
The possibility to offer pure DC pension plans (reine Beitragszusage) was introduced with the law to strengthen occupational pension – Betriebsrentenstärkungsgesetz – in 2018.
In the social partner pension model the employer is required to pay company pension contributions for employees to an external pension provider, for example a pension fund, without giving guarantees on the level of benefits.
Waiving guarantees on benefits gives room for investments to employees, potentially leading to higher level of pension provisions. The contributions paid by employers are invested by the pension fund in a broadly diversified portfolio to achieve higher returns and with an eye to ESG criteria.
Earlier this year the German Federation of Chemical Employers’ Associations (BAVC) agreed with trade union IGBCE to sign the first industry-wide social partner model for occupational pensions.
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