Support for mandatory occupational pensions is gaining momentum in Germany following backing from the German Trade Union Confederation (DGB), which represents 5.4 million workers across eight unions.

DGB chair Yasmin Fahimi said unions are prepared to support compulsory workplace pensions, co-financed by employers and based on collective bargaining agreements, extending coverage to the roughly 20 million workers who still lack an occupational pension.

Political parties have reacted positively to the proposal, which would likely require parliamentary approval.

Finance minister Lars Klingbeil of the Social Democratic Party (SPD) has expressed support for the DGB initiative, as have members of the Christian Democratic Union (CDU). Die Linke and the Greens have also welcomed the proposal.

Overall, auto-enrolment is increasingly being viewed as the most effective way to boost occupational pension coverage, which has declined in recent years among employees subject to social security contributions.

BaFin office building

German financial supervisory authority BaFin has ended its intensified supervision of Pensionskassen, as funding and solvency positions have improved

Elsewhere in Germany, financial regulator BaFin has decided to end the intensified supervision of Pensionskassen introduced during the prolonged low-interest-rate environment.

Higher interest rates have helped improve the solvency and funding positions of occupational pension vehicles. However, BaFin warned that risks remain, particularly in governance, investment management and exposure to private markets.

To mitigate additional risks, Bayer has almost fully hedged its foreign currency exposure. More broadly, DAX-listed companies are increasing hedging of US dollar exposure across fixed income, credit and private market portfolios.

In Switzerland, Pensionskasse Credit Suisse is reducing its equity allocation as part of a broader de-risking strategy.

The pension fund of the former Credit Suisse is also assessing whether, and in what form, it should merge with the UBS pension fund, as the integration of the two banks is expected to be completed by the end of the year.

Items to note:

Luigi Serenelli

DACH Correspondent

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Luigi is IPE's Berlin-based DACH correspondent. His coverage includes regulation and the latest pensions and investments trends, and, being a native Italian, he also covers Italy’s pensions market. He has reported from Italy and Germany on international politics and business for European and US publications including USA Today, Bloomberg BNA and for the investigative magazine L’Espresso. He was previously Germany correspondent for Mergermarket covering M&A.View full Profile

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