GERMANY - Metallrente, the pension fund for employees in Germany’s metalworking and engineering industries, has posted a 48% rise in sales of its corporate pension in 2004 despite difficult market conditions.
Metallrente said pension sales totalled 140,000, an increase of 44,000 from the previous year. Contributions to the pension fund rose to €176m from €120m, it said.
According to Heribert Karch, chief executive of Metallrente, the increases were achieved despite difficult market conditions in 2004. He said these included pension reforms that made people uneasy and competition from German life insurers, which held a “fire sale” for capital-based life insurance policies before they were taxed from January 2005 1.
Karch said Metallrente was making good progress in getting companies in its industries to offer its pension. Around 7,000 companies currently offer Metallrente’s pension, and Karch noted that demand was particularly strong, at around 15%-20% of employees, among small to midsize firms.
Like last year, nearly 90% of Metallrente’s insured members opted for their pension to be administered in the form of a traditional Pensionskasse, which by law may only invest 35% of retirement savings in equities.
No figure was given for those who want Metallrente administered in the form of a more equity-oriented Pensionsfonds – the original mission of the pension fund when it was launched in 2002.
However, Karch also said the Direktversicherung (direct insurance) form of pension administration would gain steam now that the government had placed it on equal footing with the Pensionskasse. This would have a positive impact on sales, he added.
Finally, Karch confirmed that as of 1 January 2005, Metallrente had three new shareholders, including R+V, Volksfürsorge and Swiss Life. These insurers are to share a 45% stake in Metallrente along with BHW, a building bank and life insurer Victoria Leben.
The other 55% majority stake is held by German insurance giant Allianz. Allianz Global Investors also manages the assets accumulated by Metallrente.