Germany’s financial supervisory authority BaFin has appointed a second special representative with executive board powers at VdW Pensionsfonds after skills shortages prevented the pension fund from filling a mandatory management role.
BaFin said the appointment of Sebastian Sturm as a managing board member ensures that VdW Pensionsfonds meets the legally required minimum number of executives.
According to the regulator, the scheme breached legal requirements under the German Insurance Supervision Act (VAG), which stipulates that Pensionsfonds operating as stock corporations must have at least two managing directors at all times.
BaFin said VdW Pensionsfonds was understaffed and unable to guarantee that it would fill the vacant managing director position within the required timeframe.
The regulator had already intervened in November by appointing Hans Melchiors as a special representative with managing director powers.
Melchiors is a former board member of Pensions-Sicherungs-Verein VVaG (PSVaG), the insolvency protection vehicle for German Pensionsfonds and other occupational pension funds.
Hard to fill key positions
German occupational pension funds are increasingly struggling to recruit senior staff, driven by skills shortages and demographic trends, according to a BaFin study published last year.
Occupational pension funds in Germany, which are often relatively small, compete with banks, insurers, investment companies and other employers for qualified personnel, BaFin noted.
Pensionsfonds, as well as Pensionskassen – another occupational pension vehicle – face “significant problems” when recruiting for key functions, including managing directors, a BaFin spokesperson told IPE.
“Especially smaller pension funds find it more difficult to fill positions, but meanwhile we observe that also larger pension funds have increasingly problems [in recruiting staff],” the spokesperson added.
VdW is among the smaller Pensionsfonds under BaFin supervision, ranking 32nd out of 35 in Germany by assets under management, according to the regulator’s latest statistics.
The shortage of skilled workers in occupational pension schemes is a recurring theme in BaFin’s supervisory dialogue with pension funds.
Consolidation within the sector is widely seen as one potential solution. BaFin has raised the topic of consolidation with supervised schemes, although any final decision on a merger rests with the pension fund itself, the spokesperson said.
