Siemens in DC switch
Industrial group Siemens has called its switch to a defined contribution pension system a “leap forward”.
Siemens’ Thomas Nitz presented the changes brought about by the Munich-based group’s new pension policy in a briefing titled “the leap forward” at the annual meeting of the corporate pension association ABA.
Nitz said the firm, which introduced a sort of insurance for its workers in 1872, sought to put “old-age care on a solid base”.
But he added: “This requires a complete re-shaping of our company scheme.” The switch from a traditional monthly payout was described as “the most significant change”.
The so-called Siemens-Modell entails a basic contribution, a minimum guaranteed interest rate of 2.75% and a single “final surplus credit note”.
Nitz explained they would benefit from greater flexibility, being able to choose between a payout in instalments or a pension. The list of potential benefits also included the chance to enjoy higher minimum guarantee rates and the “higher contribution for earlier career” option.
To ensure transparency, Siemens will issue an account statement, he added.”We are confident that the more workers devote attention to the new system, the more they will know how to value the company pension fund.”