Crisis halts pension fund creation
GERMANY - The German province of Lower Saxony has postponed plans to create a public pension fund, IPE has learnt.
"The tax income of Lower Saxony has deteriorated in the financial and subsequent economic crisis," said a spokesman for the province's finance ministry.
"The regional government of Lower Saxony has therefore decided to postpone the creation of a retirement scheme."
The province announced last summer that it wanted to follow the example of other German provinces and fund the pension provision of communal employees. (See earlier IPE story: Optimum allocation for civil servants' pensions revealed)
Federal civil servants in all German provinces are already covered by the federal public fund VBL, and Lower Saxony currently has around 68,000 civil servants.
The finance ministry said it would be doing the asset management itself were the scheme to go ahead.
Other regions have chosen to employ the former central bank, the Bundesbank, to look after their asset management as the bank has, by law, to offer this service free to such pension funds. (See earlier IPE story: Another German province chooses 'Fed')
Almost all of the 16 German provinces have so far chosen to create pensionsfonds for civil servants and Schleswig-Holstein announced its intention to set one up, in the budget draft for 2010, starting with a one-off payment of €3.5m.
Other provinces which already have created such funds include (with starting dates in brackets) the following according to figures compiled by the association of local and church pension schemes AKA:
Baden-Württemberg (2009), Bavaria (2008), Brandenburg (2009), Mecklenburg-Vorpommern (2008), North Rhine-Westphalia (2006), Rhineland-Palatinate (1996), Saxony (2005), Saxony-Anhalt (2006) and Thuringia (1999).
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 firstname.lastname@example.org