GERMANY - Moving accrued benefits between different forms of retirement provision vehicles in Germany will now be easier, as regulations were extended to include certain Pensionsfonds.
In 2005, an agreement was signed to ensure the easy transfer of accrued vested pension rights between Pensionskassen and Direktversicherungen, or direct insurance contracts - when employers are changing jobs, for example.
This agreement has now been extended to include insurance-based Pensionsfonds, according to Adreas Buttler, head of the pension consultancy febs Consulting.
German companies, in addition to having to choose among five different ways to set up occupational pension provision, must also decide whether to calculate their Pensionsfonds as an insurer would.
Because the insurance-based Pensionsfond is more comparable with a Direktversicherung or a Pensionskasse, which in Germany is also insurance-based, only this form of a Pensionsfond will be part of the agreement.
Transferability among the three forms of occupational pension provision is tax-free.
The new agreement also includes the possibility to get a 'quote' on a possible transfer so the employee can then decide whether it makes sense to transfer the benefits or leave them in the existing fund.
The existing provider, however, can decline a transfer - for example, if a company is dissolved - if the transfer exceeds €1.3m.
The old agreement will be phased out by the end of January 2011, but the new regulations can be applied now if the provider has signed up.