MetallRente, the pension fund for employees in Germany’s metalworking and engineering industries, has recorded another year of double-digit growth in sales of its corporate pension.
As of December 31 last year, MetallRente says it insured 155,417 workers in the sectors, an increase of around 15% on the previous year.
The fund also says that it had increased the number of firms offering its pension by 22% to 8,611 in 2005.
Contributions from its insured members totalled €199m in 2005, up from €175.5m in 2004. MetallRente’s total assets are €548m.
Chief executive Heribert Karch says the growth in acquisition of firms - especially small and mid-size enterprises - was evidence of the pension’s “great potential” in that sector.
Launched in 2002, MetallRente offers three forms of pension administration: the equity-oriented Pensionsfonds, a Direktversicherung (direct insurance) and a Pensionskasse (traditional German pension fund). The MetallRente is a defined contribution plan.
MetallRente said last year around 90% of its insured members opted for the Pensionskasse which, like other insurance-type vehicles such as the Direktversicherung, faces a 35% cap on equity investment and a 5% cap on hedge funds.
However, owing to strong equity markets, MetallRente said the Pensionsfonds had the best performance of all its vehicles, finishing 2005 with a 17.5% return on assets. Pensionsfonds are the German equivalent to Anglo-Saxon pension funds and so follow the ‘prudent man rule’ for investing.
Turning to the outlook, Karch says that MetallRente was “very optimistic” for 2006 and planned to widen its product base.
German insurance giant Allianz holds a majority 55% stake in MetallRente. The remaining 45% stake in the fund is shared between five firms, including life insurers R+V, Volksfürsorge, Swiss Life and Victoria Leben as well as building society BHW.
Allianz Pension Partners, a 60-member pension sales and advisory firm, is in charge of selling MetallRente within the metalworking and engineering industries.
Allianz Global Investors, meanwhile, assists on the fund’s portfolio management.