Union Ver.di and AGV Banken, the employers’ association for the private banking industry, have officially started the first social partner pensions model for the German financial industry to offer pure defined contribution (DC) plans to employees.
The first meeting of the social partner advisory board took place on 23 January, with Jens T. Thau, deputy chair of AGV Banken, elected as chair, and Judith Kerschbaumer of union Ver.di elected as deputy for the next two years.
“The next step, in coordination with the social partner advisory board, we will advise companies directly and provide information about the [pension plan] offer,” said Marco Herrmann, member of the board of the pension provider for the financial sector BVV.
At BVV, the social partner advisory board is central for designing and implementing pure DC pension products, with a key role played by the collective bargaining parties. It has extensive powers, the right to make recommendations on designing pension plans and investments.
The body’s chairmanship changes every two years between employer and employee representatives. It has 12 members, split equally between representatives of employers and employees.
Financial supervisory authority BaFin had previously approved the pension plan for BVV.MAXRENTE to offer the financial industry the social partner model through BVV Pensionsfonds.
The pure DC options BVV.MAXRENTE free up employers from liabilities without guarantee for the employees.
Private banking companies pay contributions to the BVV Pensionsfonds, according to the “pay and forget” principle, managing the assets in two conservative and one risk-oriented product, BVV said.
The official start of the social partner model for the banking industry is “a milestone in retirement provision in the financial sector and beyond”, added Hermann, as it is only the third model of its kind in all of Germany.
Before, the social partner model was agreed by the German Federation of Chemical Employers’ Associations (BAVC) and the trade union IGBCE in the chemical industry, and by Uniper and Ver.di.
The social patient model with its DC option is one further way to offer occupational pensions in Germany on top of Pensionskassen, Pensionsfonds, and direct insurance (Direktversicherung), direct promise (Direktzusage) and support funds ( Unterstützungskasse).