Board calls for insolvency levy changes to Germany's PSV
GERMANY - The German pension insolvency fund, Pensionssicherungsverein (PSV), is thinking to adopt a more risk-based levy and increase reserves, according to Dieter Hundt, chairman of the supervisory board.
At the PSV's member assembly, Hundt lauded German companies for "sticking with their responsibility" and paying the high levy, which quadrupled in 2009 to 1.4%.
He said: "The PSV contribution structure has remained virtually unchanged since its inception in 1974, but the occupational pension landscape has evolved."
Hundt added that the current levy calculation did not mirror the varied risk profiles of the different forms of occupational pension provision in Germany.
He said many companies were going for an insurance-based outsourcing or back-up funding - through a CTA, for example.
"Therefore, we are intensively discussing how this trend toward risk hedging can sensibly be considered in the PSV contribution," Hundt said.
However, he questioned whether the simplified levy calculation as proposed by the federation of employer representatives would find a broad consensus - which is needed to make the necessary legal changes. (see previous IPE story: German employers propose simplified solvency levy)
"In addition to this, we also have not come to an internal agreement on whether or not we want a risk-based levy," Hundt said.
The PSV is also considering increasing reserves to minimise the volatility of the contributions, which are currently calculated on the basis of insolvencies in a year.
For 2010, Hundt did not expect a very high levy (to be set in November), as insolvency levels are "back to normal again - at the moment".