Germany’s Heidelberg to supplement pensions
GERMANY – Printing machinery firm Heidelberg Gruppe, is to provide its 12,000 employees in Germany with a supplement to their company pension in exchange for their agreeing to work more overtime over the next five years.
According to Heidelberg sources, the supplement will equal four pay days for each employee. It will be paid out as a lump sum for each of the next five years.
The firm currently provides its employees in Germany with a defined benefit-type pension. These pensions are funded via book reserves on its balance sheet, in what is known in German as the Direktzusage.
At the end of March, the pension assets held in this way totalled €595m, almost all of which were for German employees. A rough calculation indicates that the additional supplement could add several millions of euros to the assets held in the Direktzusage.
As per government pension reforms of 2001, which gave each worker in Germany the right to a defined contribution pension scheme, Heidelberg has a DC scheme on offer. The company does not provide matching funds to the scheme, which permits an employee to set aside four percent of monthly salary tax-free for retirement savings.
The Heidelberg sources said that so far, only around 11% of Heidelberg’s 12,000 German employees had made use of the DC scheme, despite the company’s internal promotion of it.
The assets from the DC scheme are administered by a Pensionskasse, or traditional German pension fund and by a Direktversicherung, which is a direct insurance contract.