bAV: more than 330 billion Euro liability potential annually !

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Millions of employees have a company pension plan. Every year, more than 330 billion euros flow into the health care system as so-called cover funds.


As the Stuttgart Labor Court (Gz. 19 Ca 3152/04) has now determined, employers are liable for gaps in pension provision.

The case:

The employment contract with personnel manager P. is terminated. His company was sold. Now he is investigating how the insurance company has managed the money from the company pension scheme. Not even 15% of the deposits were still there! For 22.5 months, 364.32 euros had been paid in – a total of 8,197.20 euros.

When personnel manager P left, only EUR 1,218.18 was available as actuarial reserve. The insurance solution: According to experts, more than 95% of all company commitments in Germany are incorrect. In the present case, the money had been invested in an insurance policy with a “zillmerised” tariff – here, hardly any money is invested for the customer in the first few years, but rather the customer’s money is used to finance, among other things, the agent’s commissions (distribution costs) and the insurance company’s administrative costs in advance.

The insurance company then refers to “cancellation discounts”: In fact, this means that the sum of the paid-in premiums is often only available as actuarial reserve after 7 to 10 years (without interest!).



Liability for zillmerised tariffs normally only ceases when the surrender value reaches at least the paid-in insurance premiums. However, with most fully zillmerized insurance policies, this value is often not reached in the first few years.

If, for example, in the event of an employee leaving the company prematurely, no premium guarantee has been agreed in the policy, the employer is subsequently liable for the difference. According to this ruling, liability in the case of zillmerised tariffs always exists if there is no verifiable (e.g. written) agreement between employer and employee on the economic effects of the chosen insurance tariff.


Theimportant thing is that the agreement and clarification must be in place before (!) the occupational pension scheme is concluded.

Those affected: Those affected are primarily employees, – regardless of whether the monthly or annual contributions flow into a direct insurance policy, a support fund or a pension fund. The acquisition costs for such contracts are paid out as commissions to the agent, at the same time high administrative costs are charged at the same time at the beginning of the insurance and therefore this money is then also missing in the actuarial reserve.

Also employer liability: The ruling makes it clear that employees must be demonstrably informed of the respective disadvantages before (!) concluding such contracts. This is in line with the employer’s duty of care. This applies in particular to the previously popular tax-saving model of salary conversion.

Both the agreement of a “cancellation discount” and the use of “zillmerised tariffs” entail financial disadvantages. The employer is responsible for these.

And intermediary liability: Due to the administrator liability, insurance intermediaries/insurance brokers in particular are also in the fire in such cases – in addition to tax advisors. The employer can regularly take recourse here due to incorrect advice.

Insolvencies are a typical reason for this, because at the latest then the employees start to calculate.

Liability action pre-programmed: Typically, such errors are discovered by the new trusted financial services provider. It points to gaps in coverage and faulty designs in occupational pension schemes.

Afterwards the former financial mediator and the tax advisor get in the doubt a juicy adhesion complaint to the neck: If the damage height is not yet certain, then this complaint goes on statement of the responsibility! Otherwise, these legal claims could often become time-barred. The new financial services provider usually does not have the slightest desire to end up covering the mistakes of previous advisors and thus be personally liable for a longer period of time.

The crux of the matter: in principle, it does not matter whether the contributions end up being employer- or employee-funded. The employer is obliged to make additional contributions – also and especially for old contracts. About 95% of all occupational pension schemes are designed with zillmerised tariffs. This mainly affects the direct insurance, pension fund and provident fund schemes.

A recommendation:

Before taking out a company pension scheme, employers should pay particular attention to the tariff offered in the insurance policy, in addition to the currently most advantageous implementation method of the pension schemes. Even so-called group tariffs of the insurers, e.g. for medium-sized companies in certain collective agreements (metal, construction, bakery, etc.) or special groups of companies or freelancers (doctors, pharmacists, architects) offer only a relatively small discount of 3% to 5% on the annual premium.

Nevertheless, there is very little surrender value in the first few years. The non-zillmerized tariffs of the insurance companies offer already in the 1st year and in the following years high surrender values 70% to 95% of the paid-in premiums, depending on the entry age and term of the insurance policy.

However, the insurance intermediary/broker receives the commission/fee for his financial service spread over the entire term, so that no high acquisition costs are incurred at the beginning. With this solution, all parties (employer, employee and intermediary/insurance broker) have created a “win-win situation” in occupational pension provision which, in the event of an emergency (an employee leaving the company), puts the liability issue to rest.

In the case of controlling shareholder-managing directors of GmbHs, the question of liability in the case of zillmerised or non-zillmerised tariffs in the company pension scheme is superfluous, since this clientele basically decides for itself, on behalf of the GmbH and at the same time as an employee.

After all, a GGF can only hold itself liable for any decision. In this case, a liability-relevant fact could only arise for the tax advisor of the GGF if the GGF has made the advice and the conclusion of the company policy dependent on the opinion of his tax advisor.

Safe tax adviser liability: With pension promises the tax adviser is practically always in the adhesion, since these promises are to be settled mainly within the range industrial law and only by tax-legal judgements and BMF letters constantly over years supplemented. However, legal advice in the area of employment law (text modules of the pension commitment) is not permitted for the tax advisor and therefore this means “unauthorised legal advice”.

Since many pension commitments were set up years ago and are currently completely outdated in terms of text, it is hard to imagine the corresponding liability potential.

Tax advisor without cover: Please note that the tax advisor is generally liable here without (!) insurance cover. With the ? “old” Finanzdienstleister came still the natural reference to the fact that the wife of the tax councellor announced nevertheless a management consultation – for the tip commission of the tax councellor.

Now the old tax accountant will possibly lose his client, and in retrospect will have negligently destroyed his livelihood long ago in the approach. The VSH of the StB certainly doesn’t pay a cent (legal advice is not insured) – an open door for the new financial advisor to rehabilitate the case and get to the new deal.


Note: The existence of the entrepreneur (“Are you sufficiently insured?”) and that of the tax advisor is regularly at stake here. The particularly business-minded StB will – properly addressed – “eat out of your hand”, you can bet on that!

Competence in demand: With this mostly very enlightened clientele, it is above all a question of the right implementation channel (e.g. pension commitment and/or support fund), as these two pension concepts are currently the only ones with a lump-sum option at retirement age for new contracts and thus provide a flexible right of choice for the payout, which at the same time enables a better annuitisation and inheritability of the saved capital amounts.

If structured correctly, high tax effects also improve the liquidity and creditworthiness of the company, which has a positive effect on bank lending, especially in the rating procedure according to Basel II. Many intermediaries deal with the topic of occupational pension schemes – the liability is enormous. The financial intermediary is usually directly in the fire “without expertise behind him”.


by Dr. Johannes Fiala

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About the author

Dr. Johannes Fiala Dr. Johannes Fiala

Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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