Ahead of the talks between unions and employers-the so-called social partner dialogue-scheduled for early October, the insurance industry is putting forth new proposals regarding the widespread availability of occupational pension plans. Moritz Schumann, Deputy CEO of the Association of German Insurance Companies (GDV), told Funke newspapers that he wants to make occupational pension schemes accessible for “every small business.”
Schumann noted that while occupational pensions currently serve as a “hidden champion” mainly within large corporations, small and micro-businesses lack a simple, easily implementable offering. For these smaller enterprises, the multitude of available options often proves overwhelming. However, Schumann emphasized that the primary impediment for companies is employer liability. He said that the thought of guaranteeing future pension payments over decades sounds daunting to many operators.
Due to complexity and liability concerns, only one in four companies with fewer than ten employees currently offer an occupational pension. To address this, the GDV proposes providing a standardized solution-one that would be suitable even for a small snack bar. Under this model, the employer would only need to set up the contract and ensure premiums are paid; “someone else” would manage the rest. This basic product is designed to significantly reduce both the effort and the liability faced by the employers.
Furthermore, Schumann suggested that this model should be permitted outside of the current framework of the Social Partner Model. This proposal is significant because most occupational pensions currently operate within this model. In this established arrangement, employers are relieved of guaranteeing the amount of future pension payouts, provided they commit to the contribution levels. Nevertheless, employees still benefit because the employer pays a suitable security contribution in exchange for the waived liability, and the social partners oversee the investment of these funds.
Schumann stressed the critical nature of the social partner dialogue for insurers. He stated that “clarity must first be established among policymakers and social partners on how occupational pensions can be implemented widely.” It is into this dialogue that the GDV is introducing its concept for a simple basic product. Once the desired goals of employers and unions are clear, the insurers, according to Schumann, can bring suitable offers to the market.
Schumann pointed out that a substantial number of current contracts already exist in the occupational pension sector-over 16 million, most of which are direct insurance policies (life insurance). He believes the approach should be to build upon the regulation of these existing contracts rather than making fundamental changes.
“In this way, a simple basic product could be offered that employees could take with them if they switch jobs,” Schumann explained. Additionally, the GDV intends to implement an administrative platform to streamline the process. This would allow contracts to remain with any insurer, as premiums would be routed to a central body and automatically linked by contract number, all without significant bureaucracy.
Currently, only 52 percent of employees in Germany benefit from an occupational pension, representing around 20 million workers. The majority of these employees work for large companies that are organized under collective agreements, thereby meeting the conditions demanded by unions and employers.
