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“I don’t believe that our account poses any danger to the second pillar at all,” Bichsel said. “On the contrary, our pension would provide employees with more transparency regarding how much is being saved and what the costs of their pension are,” he added.
Both EFAMA, the European Fund and Asset Management Association, and German fund industry association BVI have been pushing the idea of a simplified retirement account for employees. But the BVI proposal came under heavy fire from Germany’s occupational pension industry, which sees it as a serious threat to the second pillar.
The criticism was summed up in a magazine article by Klaus Stiefermann, managing director of German occupational lobby aba, last year. “The (BVI) account offers no life-long pension, no protection for survivors or one’s own disability and not even a guarantee on paid-in savings,” Stiefermann said. It was thus not a viable alternative for German companies looking to attract and retain high-quality staff.
“Add all this up and it means the end of occupational pensions in Germany,” Stiefermann wrote. BVI’s retirement account has also been ignored by the government in Berlin, which has rolled out two subsidised private pensions, known as the Riester-Rente (for salaried employees) and the Rürup-Rente (for the self-employed).
Asset managers like Union Investment are even beginning to profit from the boom in Riester pensions, which are now owned by more than 7m Germans. Bichsel also told the pension fund congress that the EU pension fund directive was “not working”.
“It seems that there was an expectation that the directive would lead to the creation of pan-European pension funds. Well, there seems to be a serious gap between reality and expectations,” he said, referring to the fact that not one pan-European pension fund has as yet been created.
By Jan Wagner