Gunnar Hasselmann, pension consulting partner at PwC Deutschland, is calling for the pooling of more than €1trn of occupational, public, church, and professional pension fund assets into a single fund for productive investments aimed at reviving the German economy.
Hasselmann proposes establishing a “corporate pension investment fund” (bAV Pensionsfonds) to channel capital into climate protection, the digital transition, and public infrastructure, he wrote in a piece for newspaper Handelsblatt.
Funding start-ups developing climate-focused technologies via venture capital requires incentives that are effective only if investment risks are assessed as appropriate for retirement benefits, he told IPE.
State guarantees, including at European Union level, could improve risk-return profiles, nudging occupational pension schemes (€750bn) and professional pension funds (€300bn) to deploy capital to reshape the economy and protect the environment.
“Neither should individual pension entitlements be exposed to excessive risks, nor are employers prepared to bear disproportionate investment risks,” Hasselmann added.
He sees company pension funds not just as a safety net for employees, but also as a lever for a strong, sustainable economy and a strategic element of investment policy.
The call for a rethink of pension funds’ role comes amid government measures, nicknamed the “investment booster”, aimed at attracting domestic investment after years of stagnation.
The €500bn special fund (Sondervermögen) and reform of the debt brake (Schuldenbremse) are intended to mobilise capital for infrastructure, climate neutrality, and defence.
Reality check
Creating a vehicle to pool such large pension assets faces hurdles.
Pensionskassen, one channel for occupational pensions in Germany, are legally required to invest in low-risk assets that typically deliver modest returns. The impact of the infrastructure quota introduced under the broader company pensions reform remains limited, Hasselmann said.
Trust models commonly used to finance company pensions are not subject to strict investment regulations, but have rarely been seen as strategic investment vehicles, he noted in his article.
“I hope that I can contribute to the public debate and help highlight the opportunities offered by occupational pension schemes beyond their important role of providing retirement provision,” Hasselmann told IPE.
Government proposals focus on expanding occupational pensions by reducing employer liabilities through defined contribution plans with more aggressive investment strategies, tax incentives for low earners, and automatic enrolment.
But Hasselmann said more radical reforms are needed.
“They must become simpler, less complex, and more transparent. This applies to labour, tax laws and accounting regulations in connection with occupational pension schemes,” he said.
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