German Pension Strengthening Act II
With the adoption of the Company Pension Strengthening Act II, the attractiveness and efficiency of occupational pensions are on the rise. In the future, it will be possible to receive statutory and occupational pensions in parallel while continuing to work, small pension entitlements can be settled more easily, and support options for low-income earners will be improved. Additionally, simplified option systems can be introduced that allow for automatic deferred compensation if the employee does not explicitly object.
In view of the upcoming reform of the statutory pension system, an expansion of occupational pension schemes is also urgently recommended. Although the current pension package is intended to extend the freeze until July 31, 2031, meaning that the pension level for a so-called standard pensioner should not fall below 48% until that date, demographic trends suggest that maintaining this level beyond 2031 will not be financially viable. This reduction could be compensated for by supplementing it with a company pension scheme.
Profion Introduces New Reinsurance Model to Strengthen the Retirement Phase
Market demands on occupational pensions are rising, especially regarding the strengthening of the retirement phase.
Leading institutions in the field of occupational pensions have long pointed to the growing gap in the state pension system and the resulting challenge for company pensions. According to these institutions, this issue can be addressed through an increased focus on the capital market, which involves shifting away from traditional pension models.
In collaboration with Munich Re PCC, Profion has developed an alternative reinsurance model for the retirement payout phase, based on a strong capital market orientation.
Aligning with the capital market implies greater volatility at the start of retirement, which can positively impact the initial pension amount.
Our service includes reviewing each upcoming pension using this alternative model. This allows us to optimize outcomes for our clients based on the current capital market situation and the expected pension amount.
In our investment strategy, we rely on the expertise and financial strength of Munich Re, the world’s leading reinsurer and institutional investor, which employs the same investment mix for its own employee pension plans in Germany.
This information is provided by Profion, Asinta’s employee benefits consulting Partner in Germany. If you need support with your benefits in the country, please contact Asinta, and we will put you in touch with the local experts at Profion.