GERMANY – German railway and logistics giant Deutsche Bahn says it will double a profit-sharing payout for 125,000 employees in Germany if they use the sum for retirement provision.

If the employees agree to the condition, DB said it would double the payout to €100 from €50 currently. If they do not, DB said the employees would still get €50 in profit-sharing and could request a pay-out of €100 once they reach the age of 55.

DB first began a profit-sharing programme for its employees in 2004, when it posted pre-tax earnings of €1.14bn. In 2005, the government-owned railway lifted earnings to €1.35bn.

“We don’t merely want our employees to benefit from our good business results. We also want to promote retirement provision,” said Margret Suckale, board member at DB in charge of personnel.

“This is because most people would not voluntarily do more for their retirement, even though it’s clear that the government pension will shrink in the next few decades,” Suckale added.

DB also said that for its defined-contribution scheme employees already received top-offs from the firm on top of the savings they paid into the scheme.

The DC schemes have two forms of administration, namely a Direkversicherung (direct insurance contract) and an equity-oriented Pensionsfonds. Both are run by German life insurer DEVK.

All told, DB employs 220,000 people. However, around 40,000 of these employees are still civil servants and thus will receive a government pension financed by tax revenue. These civil servants also will get a profit-sharing payout equalling €80m, a spokesman for DB in Berlin said.

According to DB’s business report for 2005, its total pension liabilities stood at €1.63bn at the end of 2005. Only €141m of these liabilities were financed by external funds, leaving €1.49bn on the balance sheet.