GERMANY – Franz Müntefering, chairman of the Social Democrats, will replace Ulla Schmidt as the minister in charge of pensions in the new conservative-led government of Chancellor Angela Merkel, the SPD has confirmed.

He takes the role of vice-chancellor and minister of labour and social affairs in Merkel’s CDU/CSU-SPD coalition cabinet.

The confirmation follows the announcement last week that social affairs, which includes the state pensions scheme and pensions policy generally, will be separated from the health ministry and combined with the labour ministry.

Müntefering will now take charge of the newly merged ministry of labour and social affairs, while his SPD colleague Schmidt will remain at health.

However, major pension reform is not expected from the new government. Pensions experts say the new government will decide things like raising the retirement age to 67 and whether employers should be legally required to offer defined-contribution schemes.

Klaus Stiefermann, managing director of German occupational pensions association aba, told IPE that he hoped the new government would extend the social tax exemption for contributions to DC schemes created by the Riester reforms.

Aba feels that the exemption, which is to expire in 2008, is critical in boosting second-pillar pensions. At last count, around 60% of Germany’s private sector employees have access to some sort of corporate pension. aba is to release new statistics at a meeting later this month.

According to Stiefermann, it would be positive for Germany’s occupational pension industry if Müntefering’s ministry was to separate the civil servants in charge of the second pillar from those dealing with the state scheme. They are currently in one department in Schmidt’s ministry.

“The simple reason is that it makes our dealings a lot easier,” he told IPE.

Werner Sasdrich heads the civil servant group in charge of the second pillar.

Stiefermann added that he hoped that the new government would continue to be as involved as the former when it came EU-level policymaking that affects the second pillar.

The German newspaper Tagesschau and news magazine Der Spiegel report that the parliament elected by last month’s general election will open in mid-November.