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The VFPK, the association representing company pension funds, welcomed the government’s proposal. “This opens the way for occupational pension products that are suitable for a low-interest-rate environment,” it said.
It added that the government’s plan to do away with guarantees would ensure that pension promises – excepting those from providers considered IORPs under EU rules – would remain “outside the Solvency II regime” for insurers.
The association also “noted positively” the proposal to stop counting savings in occupational pension plans towards the so-called Grundsicherung, a basic income for people who do not earn enough to support themselves.
“For lower earners in particular, this removes a major obstacle to participating in occupational pension plans,” the VFPK said.
The comments were made days after the government presented its plan for a new type of industry-wide pension plan, which can be set up by the social partners either in new vehicles or within existing ones.
Among the key innovations is the Zielrente, a defined ambition or target pension approach without guarantees or long-term liabilities for employers.
This model is new to Germany, where sponsor companies have been required to back any pension promise, topping up funding whenever necessary.