Brandenburg legislates for new pension fund
GERMANY - Brandenburg, one of the new German federal states, is planning to set up a new pension fund by the end of this year, IPE has learnt today.
Ingo Decker, spokesman for the province, told IPE Brandenburg had a surplus of around €403m in 2007, which it will set aside to secure its pension liabilities.
"We are planning to set up a Pensionsfonds, though we do not yet have the proper legislation to do so," said Decker.
The country will now work on the new legislation, which it plans to have drafted by the summer.
Decker anticipates Brandenburg could start allocating the €403m to the new fund by the end of this year. The province plans to set aside more money at a later date to invest in its new fund.
Brandenburg is considering a Europe-wide open tender procedure for asset managers for the new fund, Decker told IPE, though emphasising "it is still too early for a tender procedure".
It is not yet clear if the state will follow a more risky, or rather a conservative investment approach with the fund.
Brandenburg is one of the five re-established states (Länder) in the former German Democratic Republic (East Germany). having joined the Federal Republic of Germany (with 10 Old Länder plus associated West-Berlin) upon German reunification in 1990.
"We have a few peculiarities in comparison with the old Länder," said Decker, adding: "So far we don't have that many pensioners, and now have pension liabilities of just €30m per year, as under the German Democratic Republic there were not any civil servants."
According to Decker, three other states - Mecklenburg Vorpommern, Saxony-Anhalt and Thuringia - are looking to secure future pensions by setting up new pension funds.
Saxony, the fifth state, already confirmed in November it will top up its pension fund for civil servants with €500m. (See earlier IPE.com story: ‘Saxony doubles fund with major injection')
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