German association Arbeiterwohlfahrt e. V. (AWO) will offer a defined contribution (DC) plan to its employees in the health and care sector through the Metzler Sozialpartner Pensionsfonds.
The AWO in Lower Franconia, Bavaria, has signed a collective bargaining agreement with trade union ver.di to provide DC plans to employees who previously had no occupational pension provision, starting from 1 January 2026.
AWO will fund the occupational pension plan by paying a basic contribution of 2.8% of monthly gross salary for all employees. Staff can make additional contributions through a salary conversion of 1.4% or 2.8% of their salary to increase their pension.
In the case of salary conversion, the employer adds a flat-rate contribution of 15% of the converted amount. AWO will also contribute 4% as a security buffer and 3% towards costs on all contributions.
AWO and ver.di chose the Metzler Sozialpartner Pensionsfonds – one of the pension vehicles set up by German bank Metzler – to provide the DC plan.
Dominik Roth, HR director at AWO, said the DC plan combines returns, reduces liability risks for employers, and provides fully funded pensions with risk buffers.
“The introduction of company pension provision based on the social partner model at AWO is a first for our health, social services, education and science department, and an important step toward better retirement provision for employees,” added Stefan Kimmel, lead negotiator for ver.di.
Metzler Pensionsfonds gains ground
The Metzler Sozialpartner Pensionsfonds is expanding its reach in Germany through a ‘docking’ strategy that allows organisations to join existing social partner models supported by collective bargaining agreements.
It will also provide DC plans for employees of private bus operators in Baden-Württemberg and in the airport ground-handling sector. The German Education Union (GEW) is also expected to launch DC provision through the fund.
“Our approach is extremely well received. I expect in the next six to 12 months at least five more collective bargaining agreements signed,” Christian Pauly, general manager of Metzler Sozialpartner Pensionsfonds, told IPE.
He added that the latest agreement between AWO and ver.di is a clear political signal to the German government to swiftly implement the second Company Pension Strengthening Act (Betriebsrentenstärkungsgesetz II) to accelerate the spread of occupational pensions.
“The government will approve the law on Wednesday, and it is likely that it will be implemented on 1 January 2026,” Pauly said.
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