Barriers to company pensions?

hemisse_company pension
An interview with Michael Bleicher about the company pension.

This magazine puts controversial theses up for discussion in “return controvers”. This time the discourse and debate revolve around whether a company pension scheme is of benefit to medium-sized companies.

The pension is not as secure as CDU politician Norbert Blüm once promised. At least not in height. According to calculations by the Deutsche Rentenversicherung, the net pension level is expected to drop from currently around 48,2 percent to 2030 percent by 45,5. The social partners are to design company pension systems through collective agreements in order to ensure a higher level of care. Andrea Nahles, who was still Federal Minister of Labor in 2017, initiated the Company Pension Strengthening Act (BRSG). The aim: to better disseminate company pension schemes - and thus to establish more company pension solutions, especially in small and medium-sized companies.

The central innovation of the BRSG is the social partner model, which enables a company pension to be introduced by means of a collective agreement. The alternatives for the second pillar of old-age provision are numerous: direct / pension commitments, direct insurance, deferred compensation, pension fund, pension fund, pure contribution commitment, Riester pension, support fund. However, no social partner model has yet been concluded. Because things are not going well in the company pension yet.

A “provider survey on company pension schemes 2017” even revealed a decrease in the relative number of employees who acquired an entitlement. Their absolute number increased from 2015 million people to 2017 million people between December 17,6 and 18,1, which corresponds to an increase of 2,9 percentage points, but in relation to the total number of employees, their share fell by one point to 55,6 Percent. Writing off the company pension would be premature. There are positive developments in medium-sized businesses, as a survey by Generali showed. Almost every second of the 200 people in charge said that they would expand their company pension scheme in line with the BRSG options. This corresponds to a doubling compared to the survey from the previous year. The increase does not seem to have been triggered without a reason: SMEs have recognized the importance for their employees. For them, employer participation in the pension is one of the three most important instruments, alongside flexible working models and home office options.

Study identified 40 more obstacles

However, implementation is still difficult. Five years ago, the Federal Minister of Labor commissioned a study to clarify why company pension schemes were not making progress. The study identified 40 obstacles. Despite the strengthening law, things don't look much better today. One of the fathers of the BRSG social partner model, lawyer Marco Arteaga, demanded during a “Handelsblatt” conference in April that “the second pillar” must be “freed from ballast”. Less complexity and easy implementation for users are among the challenges. Because complicated laws cost money and are unjust, especially for small and medium-sized companies.


Michael Bleicher:
"Company old-age provision is a long-term investment"

No company can exist without motivated employees. Demographic change calls for a rethink. The working life is getting longer and statutory pension insurance provides inadequate basic care. Companies have to act. We now offer our employees a colorful bouquet of benefits. This also includes company pension schemes. We see it as our social and responsible duty to provide our employees with detailed information about the possibilities and advantages, such as tax savings with associated deferred compensation and security for old age. Our employer allowances make it even easier to decide on a pension plan.

Tool for employee loyalty and talent acquisition

We use this tool as a company to retain employees and to attract new talent in the highly competitive job market. As with every new acquisition, the company management should check the old-age provision from a business point of view and seek advice. In general, from my point of view, a company pension is a long-term investment that has to be well thought out. But as is well known, that applies to every investment. For us, this investment in the provision of our employees was the right decision.

Michael Bleicher is the managing director of bb-net media GmbH, which processes used hardware and IT.


Marc S Tenbieg:
"Downsizing is urgently needed."

Taking into account the demographic development, it is regrettable that the company pension scheme is still rarely used as a tool for long-term employee loyalty in medium-sized companies. Reasons that deter small and medium-sized companies range from complexity to the dreaded additional expense. The high complexity arises from the lack of understandable information about the company pension and possible products. Small and medium-sized enterprises in particular often lack their own specialists and personnel resources. This can mean extra work for the employer personally, who has to concentrate on his day-to-day business. In large companies, works councils often force the need for action to introduce the company pension scheme. Small companies rarely have employee representatives who campaign for this.

Unfortunately, implementation is not simplified in practice

The new company pension strengthening act (BSRG), which came into force at the beginning of this year, should make the company pension more attractive. In practice, unfortunately, the implementation was not simplified - for example, there was an additional obligation to pass the 15 percent savings on social security contributions on to employees as part of deferred compensation. Here the legislator remains in demand: Instead of introducing further obligations, a streamlining of the BSRG is urgently needed.

Marc S. Tenbieg is the managing director of the German Association of SMEs (DMB), which represents over 14.000 SMEs.