Inflation is having a negative impact on occupational pensions in Germany, with both the number of employers interested in, or contributing to company pension schemes declining this year compared with 2022, according to an occupational pensions study conducted by Deloitte.
According to the research, 38% of the employers surveyed is “clearly” worried about losses in terms of retirement provision because of the current level of inflation, 14% consider the impact of increasing consumer prices on pensions dramatic, whereas only 14% is not worried about negative impacts.
The numbers show a reversal of the trend seen in the past few years, when several crises actually led to strengthening occupational pension provisions, while now, with inflation, the opposite is true, it added.
Inflation is having a bigger impact on employees than the COVID-19 pandemic and the war in Ukraine but, overall, 57% of those surveyed consider company pension schemes an important tool to save for old age.
The share of those who said their employer finances a company pension scheme for them fell from 50% in 2022 to 44% this year., while the share of employees that signed up for an occupational pension arrangement as an additional measure to save for old age declined from 47% in 2022 to 37% in 2023.
Employers save through occupation pensions mostly in bigger companies with 1,000 or more employees (52%), while the contribution rate is only 23% in firms with less than 50 employees, it added.
The research also showed that 21% of the employers surveyed have stated that this year they will not take any measures to save for old age, up from 17% last year, with the share increasing to 30% taking into those with below-average income.
However, company pension plans remain the most chosen way to save for old age, even though it has lost ground (-21%), and ahead of savings account/fixed-term deposit accounts (32%), while the biggest decline among employers was recorded by bonds investments (-50%), followed by private insurance or banking products (-23%), the study added.