Höchster Pensionskasse VVaG is the first occupational pension scheme of its kind to provide pure defined contribution (DC) plans under the social partner model signed by the German Federation of Chemical Employers’ Associations (BAVC) and trade union IGBCE.
The multi-employer pension scheme, with more than €3bn in total assets, will provide the ZielrenteCHEMIE DC pension plan in partnership with asset manager Fidelity International, it announced.
Around 1,700 companies in the chemical and pharmaceutical industries in Germany will now have the opportunity to offer a DC plan to their employees through a Pensionskasse, one of the ways to provide occupational pensions in Germany, it added.
“We are pleased that BAVC and IGBCE have allowed us, as the first Pensionskasse in Germany, to implement the social partner model,” said Höchster Pensionskasse’s chief executive officer Jürgen Rings.
“With the ZielrenteCHEMIE, companies can offer their employees a modern, attractive pension plan, competing for the best talents. [This is] an innovative pension product, with low administrative costs, and attractive capital investments,” he added.
Asset manager Fidelity International will invest a large portion of assets in equities to achieve higher returns, while keeping fluctuations low but with a certain degree of diversification.
The asset manager plans to invest employees’ contributions to pay out ZielrenteCHEMIE pensions broadly across asset classes, countries and regions, and sectors, it added.
“Without expensive guarantees, opportunities for returns can be used significantly better to achieve more attractive pension benefits,” added Christof Quiring, head of company pension plans and management board member at Fidelity International in Germany.
Despite promises for better pensions, pure DC plans in Germany have struggled to take off since the law allowing them – the Betriebsrentenstärkungsgesetz – was introduced in 2018.
The German government plans to change the 2018 law to try to open up the social partner model to third parties beyond collective bargaining agreements and allow more aggressive investment strategies.
Only three social partner models have started so far, all run through Pensionsfonds, another way to provide occupational pensions in Germany.
Other models started so far include the one in the chemical sector underwritten by BAVC and IGBCE, with DC plans offered through the ChemiePensionsfonds (CPF), the one signed by unions Ver.di, IGBCE, and the energy company Uniper, offered via the Metzler Sozialpartner Pensionsfonds, and the one in the banking industry run through the BVV Pensionsfonds.
Deutsche Bank has also recently opted to offer around 4,000 employees of the subsidiaries of former Postbank group a DC plan from 1 January 2025, through the BVV Pensionsfonds.
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