GERMANY - The German province of Brandenburg will start filling its pension fund for civil servants this year.

The province in the eastern part of the country had passed the legislation for the fund at the end of 2008. (See earlier IPE article: Brandenburg legislates for new pension fund)

The province will put €200m into the fund this year; money which has already been saved to cover the pensions liabilities of active civil servants and judges hired before 1 January 2009. Another €14.8m will also be put in for those who joined after that date, while €3.6m was put aside last year to meet the liabilties of newer members.

The initial plan has been to launch the fund with €400m, but €200m was used to pay debt and ease the province’s interest burden, a spokesman for the Brandenburg finance ministry told IPE.

The province or companies it owns will pay the pension contributions so far set aside for its employees into the fund, which amounts to approximately 30% of an individual’s salary.

The province can also decide each year whether or not it is necessary to allocate additional money, to ensure the fund can meet its liabilities.

The fund will start to pay pensions income from 2020. Longer-serving employees will receive part of their pension from the fund while newer colleagues will receive their whole pension income from the fund.

It has yet to be decided, however, whether the finance ministry of the province will take on managing the assets in the fund itself or whether it will outsource this task. An asset allocation strategy has still to be set too, said the spokesman.

Elsewhere, the province of Lower Saxony is not planning to revive proposals for a similar pension fund “because of the ongoing strained financial situation of the province caused by the financial and economic crisis”, a spokesman told IPE. (See earlier IPE story: Crisis halts pension fund creation).

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