GERMANY - The German government's assumptions on second-pillar pensions participation have been "exaggerated", new statistical evidence suggests.

For the first time in 20 years, the German federal statistics authority (Statistisches Bundesamt) has looked into figures on occupational pensions.

It concluded that the 64% figure for participation in the second pillar - calculated by the government for its 2008 report on old-age security (Alterssicherungsbericht) - was an "overestimation".

Roland Günther presented the figures - based on salary details that companies with more than 10 employees have to report - at the annual conference of AbA, Germany's occupational pensions association.

From these figures - which did not cover smaller companies or one-person enterprises - the statistics authority estimated that the participation rate in the second pillar was 51%.

But Günther said this was probably an underestimation and that the truer figure was "somewhere between 51% and 64%".

He added that this was "a very unsatisfying result for statisticians" and that the issue of occupational pensions had so far "evaded statistics".

Both the AbA and the statistics authority have expressed hope that new occupational data collected in 2010 will paint a clearer picture of the industry.

Regarding the government's previous report, which was based on personal contributions to second-pillar schemes, Günther said the authors underestimated multiple memberships, which stood out more clearly in the company data he analysed.

The statistics authority also found that 10% of larger companies - and only 2% of smaller ones - make use of the Pensionsfonds occupational pensions vehicle, the most recently introduced in Germany.

Looking at the Entgeltumwandlung, an option to convert parts of the salary into a second-pillar contribution, Günther found that only €7bn flowed into occupational pension schemes via that route in 2008.

He also noted that that was only 0.7% of total salaries compared with 9% going into the first pillar.

"It is just not widely used yet," he concluded, adding that most of the money went into direct insurance contracts (2.6%) and Pensionskassen (2.5%).

Günther also pointed out that 20% of employees, mainly higher earners from larger companies, were using this model.

In total, German employees saved €1,400 per year on average in the second pillar.

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