GERMANY – Membership in German occupational pension funds has largely stagnated in recent years, according to the German government's Alterssicherungsbericht 2012 report.
The seventh annual report, based on a number of industry studies and a survey of employees, presents a range of figures on the development of the occupational pension sector.
The report's authors said membership in the second pillar had "developed positively" in the decade between 2001 and 2011, with active members increasing by 34% from 14.6m to 19.6m.
However, member growth has generally been up and down, they said, particularly during the 2007-09 period.
From 2009 onwards, development was "more dynamic", due mainly to companies with existing schemes hiring new employees.
According to the authors, the foundations for membership were laid between 2001 and 2005, and the relative share of memberships "seems not to have increased since the middle of the last decade".
The researchers noted that this was mainly because, over the last year, people have been hired by sectors that typically do not offer occupational pensions, as well as because, in many schemes, people do not accrue pension benefits for the first few years.
The so-called Entgeltumwandlung – people earmarking part of their salaries for an occupational pension – was identified as the "main source for growth in widening the second pillar over the last decade".
This model, compulsory for German companies since 2001, is based solely on employee contributions.
Overall, the second pillar only contributes 6% to the total income of German retirees.
As for membership figures, the government's report noted that around 60% of all employees have accrued rights in a company pension scheme or the supplementary retirement funds for public employees.
However, it noted that," because of the high uncertainty of multiple memberships of people, this figure can only provide an orientation".
The highest membership in occupational pensions can be found in the finance and insurance sector, boasting an 80% coverage, followed by manufacturing (63%) and mining and energy (61%).
The report also noted a positive correlation between company size/income level and occupational pension membership.
No comments yet