Expert questions legality of German industry-wide pension proposals
Legal expert Hans-Peter Schwintowski has labelled the German government’s stipulation that recently proposed sector-wide pension funds must be either Pensionskassen or Pensionsfonds as anti-competitive.
In a paper on the government’s proposal for so-called ‘Dutch-style’ pension plans, dubbed §17b after the paragraph in the occupational pensions law that would cover them, the Berlin Humboldt University academic criticises plans to exclude, or make less attractive, other forms of corporate pension arrangements.
In a recent speech on occupational pensions, Jörg Asmussen, under-secretary for Germany’s Ministry of Labour and Social Affairs, confirmed that the government had postponed any decision on the issue until after the implementation of the Portability Directive and the finalisation of a tax survey.
But Schwintowski argues in his paper that the new proposal would nevertheless contravene German constitutional law, which grants companies the freedom to choose any form of occupational pension plan they choose.
The legal expert, a former member of German supervisor BaFin’s insurance committee, for the most part supports arguments that have been made in the past by insurance industry representatives.
In place of the government’s proposal, he calls for the promotion of already existing opt-out provisions in collective agreements between unions and employers.
Schwintowski points out that, with opt-out contracts, being part of collective agreements, insurers and insurance-like vehicles acting in the capacity of pension providers will have to increase transparency on costs and fees.
He also calls for the “personalisation” of occupational pension contracts, so employees might take their contracts to every company they work for, thereby “solving the portability problem once and for all”.