GERMANY - Werner Lohre, the head of one of the largest German unions, IG Metall, has claimed only a mandatory pensions system can get second pillar participation up to the necessary level of retirement income.

Speaking at the German occupational retirement federation aba's conference in Stuttgart last week, he noted the biggest problems regarding employer-led pensions participation lie mainly with SMEs where occupational pension offerings are still scarce.

"We have a structural problem regarding distribution and it is not certain we can solve that solely with a voluntary approach," said Lohre. 

"Mandatory regulations would not cost those more who are already fulfilling their social responsibilities."

While Lohre believes this would improve corporate pensions take-up, the other speakers on the conference's final panel disagreed.

"Employers only have one bag of money to distribute and if they are obliged to pay into retirement provision for their employees then there will be cuts somewhere else," suggested Lutz Cardinal von Widdern, head of pensions at pharmaceutical giant Bayer.

However, he added at Bayer - similar to many other large companies - retirement provision was already in place for almost all employees so "a mandatory regulation would not concern us directly but we would not support such a suggestion either."

Klaus Stiefermann, head of aba, noted a mandatory system was not currently on the political agenda and added his association is convinced it is too early to introduce one in Germany as the number of people paying into second pillar pensions is continuously increasing. (See earlier IPE article for a similar discussion in Austria : Too early for mandatory second pillar - ÖPAG)

Georg Recht, of the German social ministry, confirmed the government was monitoring the development of the second pillar and sees it growing.

"Introducing a mandatory system is looming in the background but so far there is no need - instead what we do need is certainty not constantly meddling with the system."

But Lohre claimed "growing a bit every year is not enough we need considerably more",adding: "All those companies which are not addressing the issue this decade will run into problems with retirement provision later," argued the union chief.

He also said all additional incentives to get people to save for their retirement, such as housing Riester, were "dissipating energies".

"We should concentrate on the second pillar and not pretend houses are a really secure investment," said Lohre. 

On the question of employee participation in companies he noted the model will not be successful and "it is not worth the effort".

However, he does not think such a model would keep people from saving for their own retirement. (See earlier IPE article: German gov't plans threaten pension savings - industry)

Bernd Vogler, from the employer representative group for the chemical industry, thinks with a lot of dedication, time and effort - which representative groups have to put into companies - SMEs can also be persuaded to provide retirement provision.

Marco Arteaga, the new CEO of Aon Germany, demanded there should be an "occupational pension light" for SMEs, as he believes current regulation is complex and the owners of smaller companies are personally liable for pension promises made.

The German social ministry has set up the website on which companies can check the future age structure and pension pattern of their employees.