German industry-wide pension fund MetallRente has recorded a year-on-year increase both in new pension contracts and contributions last year, reverting the less positive results achieved in 2020.
The number of new occupational and private pension contracts has grown last year to 56,722 from 53,873 in 2020, but below a record high of 86,422 seen in 2019, the pension fund said in a statement today.
The pension fund saw the number of contracts overall increase to 859,790 in 2021, up from 823,074 the previous year, a 5% increase compared to 786,464 in 2019.
New contributions generated an inflow last year of €72.08m, above €63.91m in 2020 but below €100.08m generated in 2019, a record sum for the past six years. The average contribution amount stood at €1.218 in 2021. The average employee yearly contribution was €1,201 in 2020, compared with €1,192 in 2019.
The number of sponsoring companies in the scheme continued to grow to 50,044 from 47,647 in 2020 and 45,078 in 2019, according to the pension fund’s figures.
Direct insurance is the most common type of occupational pension at MetallRente, while the scheme has stopped offering the Pensionskasse plan, former chief executive officer Heribert Karch said in his exit interview with IPE before retiring.
Hansjörg Müllerleile, the new CEO, and Kerstin Schminke, managing director, now run MetallRente.
MetallRente is applying an interest rate on new contracts of 2.8% this year to its PROFIL pension solution.
“In the current environment, which is very challenging for all, mirrored in the recently lowered statutory maximum interest rate, the need for reliable and profitable solutions for old-age provisions is becoming increasingly clear,” Müllerleile said.
He added: “With the Metallpensionsfonds we have long been offering employees in our industries the opportunity to save for retirement, and benefit from developments in capital markets without having to forego security”.
Since its inception in 2003 MetallRente’s Pensionsfonds has hit annual average returns of 5.9% adding 12,600 contracts in 2021.
Schminke highlighted the benefits of company pension schemes run by social partners “due to their structures, better conditions and lower costs”, over “purely private pensions, which everyone has to negotiate individually.”
MetallRente’s scheme caters for the electrical, steel, textile and clothing, IT, wood and plastics industries.
Last November, the textile and clothing industry in western Germany concluded a new collective bargaining agreement on deferred compensation to double employer benefits gradually by 2026.
“We are very pleased that our sectors are sending out signals [in support of] supplementary [pension] provisions even in these times,” said Schminke, adding that benefits resulting from collective bargaining agreements add to state subsidies to start pile up pension provisions for a decent life in old age.