GERMANY – Germany’s outspoken foreign minister Joschka Fischer has entered a row over Commerzbank’s plans to freeze pension arrangements.
The bank said last week that it plans to freeze its corporate pension scheme as of the end of this year. The plans involve the setting up of a separate trust entity. The move has been met with widespread political opposition, according to press reports.
In an interview with the weekly magazine Stern, Fischer was quoted as calling for the bank to “think again”. He added the government could not “stand by and watch company pensions being ruined” while senior management secured their own pensions.
By law, Commerzbank’s 26,000 employees are entitled to a statutory pension, the BfA. On top of this, they also receive a BVV fund - to which the company and employees each contribute 50%. The bank said this arrangement would “remain unaltered”.
A Commerzbank spokesman said in an interview: “This means that if an employee retires in fifteen years, he will get the BfA pension and the BVV fund and whatever was saved until December 31 2004, depending how much the worked earned and how long he had been working for Commerzbank.”
But he said that unless employees take steps to set up their own pension scheme they would receive less than workers who have already retired.
A 1.5 billion-euro reserve has been put aside for long-term employees, the spokesman added. The funds are to be managed by a legally separate trust.
The bank maintains that its workers’ pension arrangements are “above average” for the German market.
In December 2002 Deutsche Bank contributed 3.9 billion euros to a segregated pension trust to fund its German pension plans. The assets were transferred to a “ legal, independent trustee” via so called contractual trust arrangement in a move to take them off the bank’s balance sheet. Deutsche Asset Management manages the assets.