The reform of Germany’s second pillar pensions, approved by parliament last week, is unlikely to significantly boost company pension take-up, consultants say.
On Friday, the Bundestag passed the second company pension strengthening act (Betriebsrentenstärkungsgesetz II), introducing two notable changes to the government’s original draft.
One last-minute amendment allows employers to grant severance payments without employee consent in certain circumstances. The other requires the Federal Ministry of Labour and Social Affairs to assess, by 2027 rather than 2030, whether uptake of social partner and defined contribution (DC) plans has increased.
If the number of employees in social partner models has not doubled by 2027 compared with 2025, the government will propose further measures to expand access to DC schemes, the bill says.
Hanne Borst, head of retirement Germany at WTW, described doubling participation as “rather an unambitious goal” in light of the current spread of social partner models.
She added that while the reform contains “many small and sensible measures for company pensions”, it is “not a major breakthrough” that will drive widespread adoption.
The law seeks to extend DC plans through social partner models by enabling small and medium-sized enterprises (SMEs) to join even if they are not bound by collective bargaining agreements.
Other changes, such as company-level opt-out schemes, remain limited. Employers can offer deferred compensation plans if they make significant contributions, but auto-enrolment is permitted in only a few sectors without collective bargaining agreements.
Borst said this makes opting out “fraught with legal application problems and interpretation risks” for most companies.
Rafael Krönung, chief executive officer of wealth solutions at Aon Germany, said restrictions on opt-out schemes and higher mandatory employer contributions mean coverage will likely fall short of expectations.
Positive elements of the bill include enhanced support for low earners, expanded severance payment options for small entitlements, and more flexible funding rules for Pensionskassen, he added.
Requirements for collective bargaining agreement coverage still limit access to existing social partner DC models for many employers and employees.
“It is questionable whether the legislative changes will provide sufficient impetus to increase adoption,” Krönung said.
The occupational pension association aba welcomed the law’s “many sensible measures”, but chair Beate Petry noted it “would have preferred a somewhat more ambitious reform”.
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