German union ver.di is preparing to expand the use of social partner models to provide defined contribution (DC) pensions to employees.
Negotiations are underway to introduce further DC plans in the hospital sector, Norbert Reuter, head of the collective bargaining policy department at ver.di, said on the sidelines of an event in Berlin last week on the Rhineland model of pensions.
Germany’s health sector has grown steadily since the COVID-19 pandemic, reaching almost 6.1 million employees, according to the federal statistical office (Destatis).
Ver.di recently reached agreements with employers to provide DC plans in the transport, banking and health care industries.
By 2049, Germany will face a shortage of 280,000-690,000 nursing staff in the care home sector, with demand expected to rise by one-third to 2.15 million employees, Destatis figures show.
Occupational pensions without guarantees could play a role in attracting workers to the sector.
New territory
Reuter acknowledged that DC pensions without guarantees were “new territory” for the union and difficult to accept at first. “But the position of the union has changed over time,” he added.
Ver.di now backs DC pensions without guarantees hindering returns, adding that employer liability, under social partner models negotiated through collective bargaining agreements, marks a different stance for ver.di from IG Metall, Germany’s largest union, which continues to reject the model.
Reuter said ver.di also supports reforms to occupational pension law that would allow firms not bound by collective agreements – mainly small and medium-sized enterprises – to join existing partnerships for DC pensions.
The planned reform – Betriebsrentenstärkungsgesetz II – would simplify the process via a “dock-in” concept already implemented by Metzler through the Sozialpartner Pensionsfonds, he noted.
Allowing other firms to join existing DC schemes would also alter governance structures. For the Metzler Sozialpartner Pensionsfonds, for example, the advisory board was expanded.
However, Reuter stressed that ver.di wants employers to contribute more to social partner models and DC schemes financed through deferred compensation.
He also rejected the idea of replacing “the old system with guarantees” outright with new forms of occupational pensions.
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