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ABV gains assurances on 'first pillar' pensions status

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  • ABV gains assurances on 'first pillar' pensions status

GERMANY - Politicians from the government coalition partner CDU have told the ABV, an association of pension funds for self-employed people such as doctors, lawyers or notaries, that the funds they represent will not be incorporated into the first pillar pension system.

The subject of pension funds for self-employed groups including doctors, lawyers and notaries was part of a wider discussion recently around the sustainability of funded pension schemes versus pay-as-you-go systems started in Germany, in the wake of the financial crisis, and which led to talks about the so-called "berufsständische Versorgungswerke". (See earlier IPE article: ABV rejects move to absorb professions into state pension scheme

For a long time, unions have demanded to end the special status of these professions which are allowed to opt-out of the first pillar and acquire pension benefits only through specialist pension funds.

However, Wolfgang Bosbach, deputy head of the CDU party in the German parliament, told the head of the ABV, Ulrich Kirchhoff, that his party would never agree to an integration of pension funds like the €8.8bn NAEV (the doctor's fund for the North Rhine region) to be disbanded and its assets integrated into the first pillar.

People in those funds were cared for sufficiently and the funds were coping well without the needd for state help, he added.

Aside from a left-wing party in opposition, no party is seriously considering this move but unions are known to have been very influential in Germany historically so there has been some concern within the pensions arena about their ability to exert pressure.

However, support for the ABV also came from regional governments such as those in Northrhine-Westphalia or Bavaria which have both pledged their support to the pension funds.

Kirchhoff stressed not only have the pension funds "survived the financial crisis unscathed but they also were set on taking on the challenges of the demographic development without state help".

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com

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