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Legal experts weigh alternatives to 'Dutch-style' pensions in Germany

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The German government has commissioned Peter Hanau, a professor in the University of Cologne’s legal department, and Marco Arteaga, a partner at law firm DLA Piper, to come up with further proposals for occupational pension reform.

The legal experts are to focus on the so-called ‘social partner model’, where occupational pension plans are agreed by company and worker representatives.

Last year, Germany’s Labour and Social Affairs Ministry (BMAS) caught many in the industry by surprise after it called for the introduction of industry-wide pension funds, in a bid to increase the take-up of occupational pensions.

The government’s proposal became known as §17b, based on the legal paragraph in which they would be set down.

The pensions industry, however, largely rejected the notion of §17b plans for essentially introducing a pure defined contribution system in Germany for the first time.

In March, the government put on hold a revised proposal that included minimum guarantees to see through the implementation of the Portability Directive, scheduled for early 2016.

BMAS now wants to explore possible alternatives to the §17b industry-wide proposal.

In a statement, it said Hanau and Arteaga would consider whether new pension funds have to be set up under the §17b model, as well as how existing pension funds might benefit from the proposal.

They will also assess how companies and workers lacking collective labour agreements might be integrated into the new model.

Gabriele Lösekrug-Möller, parliamentary state secretary to BMAS, said the voluntary expansion of occupational pensions would work “only after the social partners are strengthened”.

Once the legal experts submit their final report in March 2016, the government is to decide how to “further develop occupational pensions and how to best strengthen the model”.

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