GERMANY - Only 50% of German SMEs offer occupational pensions to directors, research by Kienbaum consultancy has found, and they do not anticipate this to change soon.

According to its latest survey on pension provision for German company directors, 71% of all firms offer an occupational pension scheme for management-level employees.

Among companies with up to 50 employees, only every other employer sets up a pension scheme, while the proportion rises steadily with the size of the company, reaching 91% for companies employing more than 5,000.

Christian Näser, partner at Kienbaum Management Consulting, told IPE: "This will not change in the near future as occupational pension provision is still a financial burden for smaller companies."

The Kienbaum reported noted further: "Occupational pension provision is the most important but also the most expensive additional benefit for the companies."

The statistics show that since 1980, the share of companies offering occupational pensions has decreased dramatically from 90% to 70% in 2009 and back up to 71% this year.

"Some companies struggled with their sometimes too generous pension promises and they were drastically cut back," Näser noted.

"But we see an increase of pension plans again albeit on a much lower level, in form of defined contribution schemes and sometimes not for all employees," he added.

In a recent joint study, Allianz Global Investors and MetallRente pointed out that medium-sized German companies had two main reasons for setting up pension plans. Of those, the most important was the legal requirement to offer a scheme to which part of the salary can be transferred if employees ask for it.

However, in second place was retention of key workers by offering  additional benefits.
The study also found that many pension plans in medium-sized companies had heavily underfunded pension liabilities, although this is expected to change with new accounting standards (BilMoG).