Interview: Bernhard Wiesner - A life in pensions
Bernhard Wiesner, who has retired as head of pensions at Bosch, tells Barbara Ottawa about how he remains positive on the social partner model
When Germany finds its voice in European pension discussions, it is often one of criticism and caution. One of its main contributors has been Bernhard Wiesner, former senior vice president for corporate pensions at Stuttgart-based Bosch.
Wiesner has been in pensions for more than 30 years, repeatedly calling on stakeholders to fight for greater recognition of the unique features of non-profit occupational pensions. His greatest fear is that the current regulatory and supervisory framework in Europe might be killing the long-standing occupational pension tradition of Germany and other countries. Instead of killing it, the model should be promoted across the EU.
“There is an acute as well as continuing danger that the irreconcilable frameworks for competition in the financial and insurance sector will dominate the retirement provision landscape,” Wiesner says.
He fears the dominance of these providers could make it more difficult, and eventually impossible, for companies and social partners to reconcile non-profit occupational pension plans with this framework. In the long-term, he believes it could kill the highly efficient company-provided pension system.
In recent years, Germany has been fighting to increase EIOPA and other European bodies’ understanding of the special characteristics of its occupational pension system to prevent it being swept aside in a new sea of regulation. German stakeholders, including Wiesner, have continually pointed out the importance of voluntary, non-profit, company-based pension plans, set up in mutual agreement between employer and employee representatives.
This model is not known in every European country, and occupational pension plans are sometimes offered by employers without management responsibility. This is not in line with the German mindset of occupational pensions as a vehicle providing an employee benefit in a total-reward concept.
Wiesner emphasises that the German and Dutch form of non-profit occupational pensions is unparalleled in offering the best service at the lowest cost. But he warns that these pension arrangements need a special framework and particular legislative care.
He is also convinced any quasi-mandatory element, like an opt-out or opt-in model, would be fatal in the existing occupational pensions landscape. Wiesner says this would encumber those with low income – currently not participating in an occupational pension plan – with expensive financial products.
The tradition of voluntary occupational pension provision is long in Germany. A salient example is Robert Bosch himself, who introduced a savings plan in 1929 called Bosch-Hilfe, a retirement and dependents’ provident fund intended to provide support to employees and their relatives.
Over the decades, the number of employees has increased and the firm’s international scope has widened. During Wiesner’s time at Bosch, the occupational pension promises were re-structured into a DC-type plan with minimum guarantee. Most of the obligations are externally funded via a company Pensionsfonds. In 2002, Bosch was one of the first German companies to set up this new vehicle, with asset management outsourced to Allianz Global Investors. “A modern, high-performance occupational concept was created that can weather future challenges,” Wiesner notes.
Keeping pension plans up to date is important, according to Wiesner. “The low interest rate environment has revealed fundamental weaknesses in the very dated, typically German ‘insurance-based thinking,” he says. This underlines the need to communicate to EIOPA and other international stakeholders not only the importance of keeping intact the unique features of German occupational pensions but also to demonstrate that highly efficient non-profit concepts set up by companies and social partners can be amended to withstand future storms, even in a low interest environment.
“A lot has already been done in Germany to bring occupational pensions up to date but there is still very much to do. I am an optimist and I have contributed my fair share to be able to be that.”
Wiesner is convinced politicians in Germany and the EU will “learn from their mistakes” and that they will re-focus their attention on the social partner pension model. Within this framework he believes higher-performing Pensionsfonds and Pensionskassen will grow within a supervisory regime that makes them “fit for Europe”. This would also increase the number of employees covered under supplementary occupational pension plans.
Increasing this form of occupational pension coverage is vital for the sector all over the EU, Wiesner believes. “It is possible and high time for politicians to create the frameworks in a way that companies and social partners are motivated to introduce high-performance non-profit plans for as many employees as possible, as soon as possible.”