The German government has drafted the law to reform the second pillar occupational pension system, Rolf Schmachtenberg, state secretary for the Labour and Social Affairs Ministry, announced during the Handelsblatt conference on occupational pensions yesterday.

The 24-point draft law – called Betriebsrentenstärkungsgesetz 2024 – deals with the difficult topic of opening up the social partner model to third parties not bound by collective bargaining agreements, the state secretary said, adding that the ministry is examining the legal aspects of such change in depth.

The draft law also touches on the increase of the severance payment limit, the possibility to chose the amount of pension pay out, an option already in place in the first pillar pension system.

The draft law also deals with financial supervisory matters discussed in the dialogue process (Fachdialog) with stakeholders to strengthen occupational pensions, and tax matters, namely an improvement of subsidies for low earners, Schmachtenberg added.

Other changes could relate to the digitisation of the Pensions-Sicherungs-Verein VVaG (PSVaG), the mutual insurance association for German occupational pension schemes, investment rules, a new definition of Pensionskasse as a result of lifting the additional earning limit to receive an early occupational pension.

“We think that it is necessary [to spread] nationwide occupational pensions on a voluntarily basis,” he said, adding that a form of mandatory mechanism, proposed by the Christian Democratic Union (CDU) party, could be a second step to achieving the goal following the Betriebsrentestärkungsgesetz 2024.

George Thurnes. chair of the board of the occupational pension association aba, said that changes to investment rules, funding requirements, and financial supervisory could help occupational pensions to grow.

“We eagerly await to see the change [in terms] of [rules relating] to the social partner model,” he added.

Metzler, which set up the Sozialpartner Pensionsfonds to start the first social partner model with unions Ver.di and IGBCE, and the energy company Uniper, expects the social partner model to change next year to allow a “lighter docking” to existing collective bargaining agreements, provide easier access to the model for third parties, and further tax subsidies, according to a presentation by Christian Remke, member of the management board of the Metzler Sozialpartner Pensionsfonds.

The state secretary has showed optimism, thinking that the process to reform the pension system will continue to progress with the Rentenpaket II, the law to reform the first pillar pension system, turning it into a partially funded system, and the Betriebsrentestärkungsgesetz II running in parallel.

Kerstin Schminke, managing director of MetallRente, underlined that it is necessary to build a stable and reliable pension system, adding that endless discussions on how to fix the system unsettle people who are losing trust in all three pillar pension systems.

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