GERMANY - The VFPK, the German association of company Pensionskassen, has warned that a government move to introduce tax advantages for employers offering shares as part of salary entitlement could divert money from occupational pension schemes.

Peter Hadasch, chairman of the VFPK, said he is convinced that "the bill equals a cannibalisation of the retirement provision".

He continued: "Should employee participation be tax and social insurance-free - contrary to retirement provision - there will not be more pension provision but simply a redirection of the money."

The association said it welcomed steps to increase employee participation in the capital market but warned retirement provision had to remain a priority given the demographic challenges.

The VFPK is therefore lobbying the government to also make employee contributions to retirement schemes tax-free as well.

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