Executives of company pension schemes in Germany are calling on the country’s political parties, which are discussing to form a coalition for the next government, to tackle the complexity surrounding occupational pensions in favour of opting-out solutions, according to a survey conducted by Willis Towers Watson (WTW).

The research – carried out last week during the annual WTW’s occupational pension conference bAV-Konferenz – showed that 44% of respondents believed the decision by the next government to simplify occupational pensions schemes would help attract employees to sign up for such retirement arrangements.

It also disclosed that 23% of respondents spoke in favour of opting-out solutions, meaning auto-enrolment of employees in occupational pension schemes, and 22% were in support of additional subsidies.

The law to reinforce company pensions – Betriebsrentenstärkungsgesetz – opened up the door to opting-out based on a collective bargaining agreement, which “would also make sense at company level”, Heinke Conrads, head of retirement Germany and Austria at WTW, said.

With opting-out, part of an employee’s salary is converted into future pension entitlements unless the employee decides otherwise.

Conrads added: “Experience shows that this solution leads to significantly more employees saving for old age.”

This approach would simplify occupational pension contracts because “the employer offers a good solution and takes care of everything else – that makes the decision for old-age provision easier”, Conrads said.

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