German pension reforms boost intermediaries
GERMANY - Industrie Pensions-Verein, which provides pension services for small and medium-sized companies of up to around 500 employees, saw its client base increase by about seven percent last year to over 350,000.
The new members, more than 25,000, brought with them over 550,000 new contracts.
Founded in 1925, Berlin-based IPV designs corporate pension schemes and improves existing ones in line with changes in legislation or developments in the capital markets. It sources pension schemes for its members exclusively from four providers: Axa, Allianz, Gerling and Viktoria.
The changes taking place in the German pension system has generated extra demand for consultancy services.
“The boom last year was due to the effects of the Riester reform,” said IPV board member Jost Etzold in an interview.
The Riester reforms have been criticised for being too complicated for ordinary working people to use. The application form is several pages long. It is so complicated even pension funds themselves are confused.
Which is good news for those providing consultancy on the matter.
Etzold described 2004 as “one of the greatest challenges for IPV as many of its members want to join a pension scheme before the tax relief on investment_income is abolished from next year”.
As the changes come into effect so the growth in demand for consultancy will fall off. Etzold continued: “The boom in demand has reached a peak over the previous and current year and will surely slow down in 2005.”