Until 1996 Deutsche Post’s retirement system comprised two elements to which all employees were entitled: the state pay-as-you-go system and the employer-financed book reserve insurance fund. The system was modified after 1996 to relieve the burden on the group’s book reserve system.
At that point, the system was split in two, with only new employees in Deutsche Post itself, not group companies, eligible for the book reserve, or occupational pension as the company began to call it.
The Riester reforms have allowed Deutsche Post to go even further and completely overhaul its retirement system into a modern capitalised pension fund that re-opens it to all the group’s employees in Germany.
Deutsche Post has one big advantage over practcially all its peers: it doesn’t have to look for an investment manager.
“Deutsche Postbank, part of the Deutsche Post group, has an asset management capacity ready and waiting. This will spare us time and allow us to switch to the new system cleanly and efficiently,” says a spokewoman for Deutsche Post.
Deutsche Postbank has set up a subsidiary, PB Pensionsfonds, to take care of the fund, the assets of which will be invested via fund management arm PB Fund Services.
“PB Pensionsfonds will only be concerned with the investments and assets of the new fund. The existing pensions arm of Deutsche Post will take care of its administration,” the spokeswoman adds.
She says by separating administration and management, Postbank can concentrate on investments and Deutsche Post keeps transaction costs to a minimum. “What this all adds up to is a streamlined cost-effective system that ensures maximum return potential.”
As with many of the new funds being established in Germany, Deutsche Post has yet to determine an investment strategy but its spokeswoman says she is confident the company will get it right. “Given Postbank’s experience and dealings in the investment management market, we are sure the investment strategy we eventually adopt will provide optimum returns for our employees pensions, which is our main objective,” she says.
The new system will retain its insurance fund and disability benefits, but in time it expects all retirement and disability provision to come out of the fund.
The spokeswoman says the new fund is, in principle, supplementary to existing retirement provision but says the company is under no illusions about the future.
“At the moment it’s a bit of the old, a bit of the new. The book reserve system is under immense pressure and capitalised funds are likely to become the norm in Germany very quickly. We are in a very good position to establish ourselves quickly in the new pensions market because of our strong market capitalisation and inhouse management capability.”

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