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IPE special report May 2018

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Metallrente backs industry-wide schemes

GERMANY- The head of the Metallrente pension fund has hailed the adequate pension provision that industry-wide pension funds can bring to small company employers and employees.

“Up until now, the experience with Metallrente has shown that industry-wide funds bring together advantages for employers and employees and can also offer employees of small companies the necessary integral pensions at good conditions,” Bjoern Schuett-Alpen wrote in a newspaper article.

He said that a total of 100,000 employees from about 6,000 businesses has so far joined MetallRente, which offers three “funding vehicles” - a Pensionskasse, a direct insurance and a pension fund.

“With each of these three vehicles the employer complies with a pay agreement,” he said in the Handelsblatt daily. He added that, to improve flexibility, a ‘protection-fund’ or Unterstuetzungskasse would also be available.

Workers joining Metallrente would not be forced into “any obligatory element regarding the choice of suppliers of pensions_solutions through their employers,” he added.

And, on leaving a job to join an employer adhering to Metallrente, they would also be entitled to keep their previous pension contracts.

To make the best and most convenient choice, employers are aided by insurers Allianz and Victoria, BHW and Westdeutsche Landesbank.

The consultants also help with ‘ complex themes’ such as the “pay-switch” option, “Entgeltumwandlung”.

By law, in force since January 2002, the Entgeltumwandlung requires employers to offer their employees a company-pension plan through setting up pension schemes, insurance deals, support-schemes or Pensionskasse.

The law also allows employees to set aside a percentage of their wages towards their pension schemes.

MetallRente was founded in 2001 by the labour union IG Metall and the employers’ association Gesamtmetall to promote flexible pension solutions for both big and small companies.

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