The German occupational pensions market needs further reform if it is to compete successfully with the private pensions industry, says Klaus Stiefermann, general manager of the Heidelberg-based Aba, the German occupational pension fund association.
Stiefermann blames the government’s inability to clarify the tax structures surrounding occupational pension schemes as the latest reason the market is making slow progress. “The occupational pensions industry is ready to get going, but the government is stalling over its tax plans. Until we know where we stand regarding tax issues, we can’t move forward,” he says.
Stiefermann suggests the only way to resolve the current tax problem is new reform. “We need to come with a new positive reform structure that deals clearly and solely with tax and legal issues,” he says.
But he fears the government is unlikely to act until after the general elections in September. “Pensions mean votes at the moment. The main candidates are unwilling to commit themselves to a specific pensions policy in case it affects their chances of election. It is very frustrating. We are trying to get a pensions industry involving 15m workers off the ground and we keep coming up against legal and fiscal barriers.”
Stiefermann warns that the occupational pensions industry will lose out to the private pensions industry if the government doesn’t act soon. “The third pillar industry in Germany, whose reforms were successfully implemented at the beginning of the year, is getting a head start on the second pillar. We can’t afford to hang around much longer if we are to compete effectively.”