DAX blue-chip sets up Pensionsfonds
GERMANY - Energy giant RWE has set up a Pensionsfonds within its contractual trust agreement (CTA).
The company transferred most of its 40,000 current pensioners along with €4.3m into the Pensionsfonds, a vehicle modelled on Anglo-Saxon pension funds.
It follows the example of the German Siemens company which integrated a Pensionsfonds into its CTA in autumn last year.
German companies are increasingly trying to get pension reserves off their balance sheets. One of the solutions adopted by at least 20 listed German companies is to create a pension trust modelled on a CTA.
However, as international companies, both Siemens and RWE figured they have chosen vehicles that can operate cross-border in Europe - a Pensionsfonds.
Currently, Siemens only has the pension assets of its German-based parent company Siemens AG but the model might be extended.
Similarly, RWE might be thinking about including actives as well as pensioners' in the Pensionsfonds in the future, Karl-Heinz Adermann, head of asset management at RWE, told delegates at the 69th conference of the German association of occupational retirement provision (aba) in Stuttgart.
The trend towards more combined CTA/Pensionsfonds solutions was already anticipated last year by Bernhard Wiesner, head of corporate pensions at Bosch, which set up the first, and so far largest, Pensionsfonds in Germany.
Speaking at a pensions conference in Berlin last March, he said: "Since CTAs offer neither portability nor can be run on a European level, I expect that many, though not all, German companies employing CTAs will switch to Pensionsfonds in the mid- to long-term."
The German supervisor BaFin noted in its annual report that while the Pensionsfonds sector grew only slowly since its creation in 2002 it now sees a boom with two large companies listed on the German stock exchange making use of its.
The regulator estimates this year assets in the Pensionsfonds sector will rise from €1.1bn in 2005 to €12bn.
One cause for the sudden increased interest in Pensionsfonds is a change in regulations which came into effect in 2005. From then on, Pensionsfonds were no longer required to guarantee each pension benefit like an insurance with the same reserves.