German trade unions and asset managers are converging on the need for swift changes to expand occupational pension coverage, as dialogue between social partners under the government’s umbrella stalls and divisions emerge over the pension reform package.
Stefan Hoops, chief executive officer of DWS, told IPE that more people in Germany should have access to an occupational pension scheme.
“Therefore, it should be incumbent on employers to offer one. In our view, there should be the option for the employee to opt out, which would represent freedom of choice but would increase take-up automatically,” he added.
Hoops believes that introducing an obligation “may be a good way” to expand occupational pension coverage in Germany.
The recommendations of the pension commission should be implemented “exactly as it is”, he noted.
Franz von Metzler, a member of the executive board of German bank Metzler, said it was a “pity” that occupational pensions “faded somewhat into the background” in the pension commission’s recommendations, which called only for a social partner dialogue.
He wants to increase occupational pension coverage from its current level of around 50% to 70-80% of employees subject to social security contributions, particularly low earners.
“This could also serve as a contribution toward addressing the problems of old-age poverty,” von Metzler said during a recent event organised by publishing company Table Media in Berlin.
Expanding the social partner model for defined contribution (DC) pensions nationwide would help increase coverage, he added. Metzler Pensionsfonds offers the model in the transport, care and energy sectors, with the support of trade union Ver.di.
Ver.di backs an obligation for employers to offer occupational pensions to all employees, deputy chair Andrea Kocsis said.
Kocsis pointed to the commerce and logistics sectors, two of Germany’s largest industries, where “we have practically no company pension schemes,” she said during the event.
An increasing number of employers are looking to implement a social partner model, and “we believe this could lead to the widespread adoption” of company pensions, she added.
Social partner dialogue stalls
The social partner dialogue between trade unions, employers and other stakeholders, including occupational pension association aba, was scheduled for 8 October.
The meeting, recommended by the pension commission to discuss measures to boost occupational pension take-up, was postponed just days beforehand after labour minister and Social Democratic Party (SPD) chair Bärbel Bas stepped down following the death of her stepdaughter.
Before her departure, the SPD’s coalition partner, the Christian Democratic Union (CDU), accused Bas of delaying the pension reform that her ministry was responsible for drafting.
New labour minister Alexander Schweitzer of the SPD wants to reach a compromise, as differences persist within the coalition over the reform package.
A spokesperson for the labour ministry told IPE that the Confederation of German Employers’ Associations (BDA) and the German Trade Union Confederation (DGB) “expressed a desire to first allow space for discussions among themselves”.
The discussions’ findings could feed into a meeting organised by the labour ministry, the spokesperson said, declining to comment on dates or locations for the meeting “to provide a space for confidential exchange”.
BDA and DGB are starting discussions among themselves today, IPE has learnt.
“Our goal is to achieve the most comprehensive coverage possible for company pensions”
IG Metall
Germany’s largest trade union, IG Metall, expects the social partner dialogue to lead to concrete measures to significantly increase occupational pension take-up and to be implemented through legislation.
“Our goal is to achieve the most comprehensive coverage possible for company pensions,” the union said.
According to IG Metall, this requires moving away from a purely voluntary approach towards greater obligations, increasing employer contributions, closing pension gaps – particularly for employees in smaller firms and those on low incomes – and strengthening collective agreements and collective bargaining.
Pia Mondorf, policy adviser for social security at BDA, warned that implementing the pension commission’s recommendations could increase contributions, particularly to statutory pensions.
An increase in contributions, split equally between employers and employees for capital-funded pensions within the statutory pillar, is “unthinkable”, she said during the event.
