GERMANY - Frank Baumeister, from Germany's social ministry, has criticised rules set by the European Commission requiring all government-led organisations to tender for providers of occupational pensions as unfair and unncecessary.

The European commission began legal actions against Germany in the summer following criticism of how German towns and provinces select providers of supplementary pensions for their civil servants and other employees.

Each of these decisions, no matter how small the community is, should only be made after a tender, the commission states, but Baumeister argued at last week's aba conference in Stuttgart: "Why do communal employers have to undergo this additional regulatory requirement while private employers do not?"

He noted a tender means the unions and communities involved in the negotiations have less influence on who will eventually provide pensions.

"And in several countries we can now see what it means to award the tender to the cheapest provider in the market," he claimed.

Germany is currently also awaiting a decision by the European Courts of Justice (ECJ) on various details regarding the third-pillar 'Riester-Rente' as the EC wants subsidies for partners of Riester beneficiaries when the partners are working abroad.

The European Commission also wants to allow Germans to withdraw money from their Riester account to purchase houses or flats abroad.

However, Germany argues the subsidies for partners working abroad are not required under EU's social anti-discrimination legislation as this would be considerd a tax and not a social measure.

Germany also argues the so-called housing Riester introduced earlier this year was partially designed to ensure people would not need state subsidy in old age because they own property in Germany.

Property abroad would not necessarily be included in retirement income calculations, officials argued.

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