GERMANY - Chemical companies in the German province of Hessen are increasingly spending money from 'demography funds' on occupational retirement provision, a poll has revealed.
In late 2008, the German chemical industry - including pharmaceutical companies - reached a collective agreement that included the compulsory creation of demography funds in each company instead of increasing average salaries.
Under the terms of the agreement, each company must pay €300 per year into a pot that is kept on the companies' books.
The funds can be used for various demography-related purposes, such as part-time working opportunities for elderly employees, invalidity protection and retirement provision.
However, a poll conducted by industry association Hessenchemie shows that 70% of the companies are using the money to boost buffers for retirement provision.
A spokesman for Hessenchemie told IPE: "It is mainly the small and medium-sized enterprises that are using the funds for this purpose."
The spokesman said the decision to spend the funds on retirement provision came largely as a result of a compulsory demographic analysis of the companies.
In a press release, Hessenchemie noted that, in many cases, this analysis "brought home the demographic challenges" to the companies for the first time.
It also pointed out that 97.8% of all companies in the industry in Hessen had already implemented the new collective agreement that includes the demography fund.
According to Hessenchemie, this is a very high percentage compared with other provinces.