IG Metall, Germany’s biggest union, has rejected the possibility of offering pure defined contribution (DC) plans to members under the so called social partner model during a meeting with members held in Frankfurt this week.
The majority of the IG Metall delegates passed a motion prohibiting the organisation from signing up collective bargaining agreements necessary to offer DC plans (reine Beitragszusage), Frankfurter Allgemeine Zeitung (FAZ) reported.
The decision was taken with 272 votes in favour of the motion, and 139 against, after a contentious discussion, according to the report.
IG Metall’s models for old-age pensions exclude “company pensions based on pure defined contribution promises, and therefore also the social partner model”, according to the motion, FAZ reported.
The union is discussing the best way to ensure that employees receive an adequate level of pension.
The consensus within the union is to strengthen statutory pensions through sustainable financing and a higher level of benefits, a spokesperson told IPE, adding that IG Metall also supports forms of supplementary pensions financed by employers.
The union is in favour of supplementary, employer-financed company pensions for everyone, with guaranteed minimum benefits, employer liability, keeping existing regulations intact, the spokesperson added.
This means that company pensions based on pure DC arrangements, including the social partner model, are ruled out, the spokesperson said.
This also means that representatives of the IG Metall in the state of Baden-Württemberg, which have been negotiating the implementation of DC schemes with employers’ representatives, now has its hands tied, Handelsblatt reported.
Two social partner models have been signed in Germany since the law to strengthen occupational pensions – Betriebsrentenstärkungsgesetz – introduces DC plans since 2018: one by the Federation of Chemical Employers’ Associations (BAVC) with the trade union IGBCE, and the other by energy company Uniper with unions Ver.di and IGBCE.
The governing coalition of liberal party FDP, Greens and social democrats (SPD) underlined in the programme for the current legislative period the need to implement further social partner models. It is planning to reform the model to open it up to employees and firms not bound by collective bargaining agreements.
At the meeting in Frankfurt, delegates of the IG Metall, which represents over 2.2 million employees in the metal industry as well as information and communication technology sectors, warned against embarking on the “fatal path” of linking employees’ retirement incomes to the stock market, rejecting the idea that the FDP’s market-oriented approach will find its way into company pension schemes, Handelsblatt reported.