Commerzbank sets date for DC agreement
GERMANY – Commerzbank says the details of its controversial new defined contribution company pension scheme will be agreed with employees by the end of June.
“The three existing internal agreements on the bank pension are to be replaced by a uniform defined contribution internal agreement,” the bank said in its 2003 annual report. “Negotiation of the details was to begin at end-February and is to be concluded by end-June 2004.”
The bank said the closure of the scheme – which did not include benefits stemming from the industry scheme Bankenversicherungsverein, or BVV, was “a hard decision for management to take”.
It was part of a wider cost-cutting exercise which has seen 6,700 jobs go. A further 700 jobs will still be lost, the report said.
“While the disappointment on the part of the employees affected is understandable, the cancellation as of December 31 2004 of the bank’s internal agreements on the company pension scheme based on the last net salary drew some polemical, and for the most part poorly informed, commentaries in the public sphere,” board chairman Klaus-Peter Mueller wrote in the report.
The bank’s pension arrangements hit the headlines earlier this year. Under the agreement, the bank is to transfer its 1.5 billion euros of accumulated pension capital into a separate trust.
“We were unable to communicate in an appropriate form and adequately the crucial point – namely, that our company pensions as well should be made calculable and should be maintained for future generations.”
“We expressly support the institution of the company pension scheme as an ever more important pillar in Germany’s system of old-age provision. However it is essential for companies that their future expenses – as part of their wage related costs – can be calculated clearly and remain with in a tolerable framework.”
The bank said former pension systems “entailed substantial and also incalculable risks that would have become economically intolerable and unjustifiable for the bank”.