Changing of the guards at Aba
The sceptre has been handed over - in this case, it is actually a shiny metal cigar case which the first chairman of the Aba, Albrecht Weiß (1890-1961), received from members for his sixtieth birthday in the early years of Aba's existence.
At the association's seventy-third annual meeting in Berlin in May 2011, this relic of the early days of retirement provision in Germany was passed on from Boy-Jürgen Andresen to Heribert Karch who was visibly moved at this symbolic gesture. However, it was not only symbolic, as this item also stands for a long tradition of carefully building an occupational pension system that is "not just a pension fund industry", as Andresen put it in his farewell speech, but perceived by all participants as a stakeholder system with close co-operation between social partners, pension providers and politics.
Andresen leaves after 24 years as chairman and 33 as a member of the Aba board, which consists of representatives from the wide range of Aba stakeholders - from employers to union members, insurance CEOs to actuaries. In his farewell speech, he stressed that Aba has always played a neutral role, explaining systems and pointing out consequences instead of lobbying. But he also noted: "It is clear that you cannot be everybody's darling as chairman of an association with such a heterogeneous membership".
He fought the toughest fights together with Klaus Heubeck despite the fact that for the longest time they were actually competitors - Andresen spent many years at Dr Dr Heissmann in Wiesbaden, which was later acquired by Watson Wyatt, while Heubeck heads the consultancy founded by his father. "We were working for the cause as it was clear that we needed to strengthen the second pillar," Heubeck said. "There would be no occupational retirement provision in Germany today without Aba".
Talking to IPE, Andresen pointed out that one of the larger conflicts during his time as fifth chairman of Aba did, in fact, lead to an enormous boost in the system.
In 1999, the then labour minister, Walter Riester, proposed the introduction of a compulsory third pillar. This rattled Aba as it feared a negative impact on the second pillar. This led the association to publish thoughts on a mandatory second pillar, which woke up employer representatives, Andresen explained. Eventually Riester himself, later best known for his state-subsidised third pillar pensions, backed away from his initial idea and made occupational pensions the top issue for his ministry. In the same year, Aba hired Klaus Stiefermann as managing director; he joined from the association of German insurers.
During his term, Andresen also had some "intense arguments", as he put it, with Bert Rürup, former economic consultant to the government, with whose support the Pensionsfonds was introduced in 2002. "It was put into the bill, more or less overnight, as a PR exercise by the government," Andresen said. Aba then had to implement it and make it work. In the meantime, this fifth form of occupational pension provision has gained some ground in Germany with €2.1bn currently managed in these vehicles. However, this is still a very small amount compared with €300bn still being kept as book reserves (Direktzusagen) which also fall under Aba's remit.
One of the major challenges Andresen leaves to his successor is the influence EU legislation could impose on Germany's carefully webbed retirement provision. As many of the vehicles are insurance-based the industry fears the impact of Solvency II principles on the retirement provision sector - just like the EFRP. "It is correct that occupational pension music is still national but it is more and more being composed in Brussels," Andresen says.
He is the second chairman in the Aba's history to be asked to stay on as honorary chairman and together with Heubeck, who remains on the board, they will support Karch. In his inaugural speech, Karch vowed to cherish the silver cigar case and with it Aba's values of consensus and neutrality. Still, his approach will differ from that of his predecessors, as he is the first Aba chairman with a union background and he is by far the most outspoken German pension fund head.
He joined the industry ‘only' 10 years ago but he will be heading the association together with Joachim Schwind, chairman of the Hoechst Pensionskasse, who was re-elected deputy chairman and a new deputy, Georg Thurnes, CEO at Aon Hewitt. This triumvirate will ensure continuity in a pensions system that is deemed stable by experts and participants and where change is welcome -- if only slowly.