Germany’s Finance Ministry (BMF) has deemed Pensionskassen and so-called Unterstützungskassen, or support funds, as “privileged investors” in a new draft of an amendment to the country’s investment law.

The change means they will be refunded certain taxes introduced on domestic fund structures.

Under the BMF’s initial proposal this summer, Pensionskassen and Unterstützungskassen would have fallen under new regulations introducing a 15% tax on dividends, rental income and sales profits from domestic retail funds.

The German pensions industry raised a number of concerns about the government’s initial proposal, with the investment fund association (BVI) warning that it would have been a “heavy burden” for occupational pensions.

Several stakeholders have welcomed the revised draft, presented at the end of last week, but they have also called for further amendments.  

The new independent think tank Pensions-Akademie, launched by the German branch of KAS Bank, told IPE the amended draft was “a significant improvement”, but it argued that the proposed changes to the tax regime would prove a challenge for pension providers.

The BVI said the segment on Spezialfonds refunds for “privileged investors” were “too complex” and would increase costs for the KVG asset management platforms and their members.

“Overall,” the Pensions-Akademie added, “the changes to the draft … are in no way enough to give occupational pensions the important status they should have, given the demographic challenges.”

Georg Geberth, head of the tax and pensions working group at Germany’s pension association (aba), told IPE it was “fortunate” the BMF had amended several parts of the draft.

But he said further amendments had to be “looked into in more detail”, as fund investments were of “major importance” to the occupational pension industry.

Other associations – for public and church pension funds (AKA) and Versorgungswerke (ABV), for example – also gave the amendments a cautious welcome while noting that they would need more time to assess the impact the new draft might have on their members.

According to the BVI, the amended draft will render Spezialfonds “attractive again”, as the BMF has forgone its initial plan to introduce a flat-rate taxation up front for re-invested profits from these vehicles.