Company Pension Act – Subscription right

Published on 25.06.2007

Company pension scheme: BAG decides – no discrimination against women due to age limit for qualifying period:
The German Company Pensions Act (Betriebsrentengesetz – BetrAVG) sets deadlines after which vesting occurs. Previously, one of the requirements was that the employee had to be 35 years old – in the current version of the BetrAVG, an age of 30 is sufficient.
BAG decision:
The Federal Labor Court (Bundesarbeitsgericht, BAG) decided on October 18, 2005 (Case No. 3 AZR 506/04), as did all the lower courts, that there was no discrimination against women. The plaintiff had unsuccessfully argued that, on average, women leave the workforce at age 29 to have children. This would make it impossible to acquire a company pension or to reach the age required for the entitlement.
Employee Liability Trap:
In the case of employer-financed direct insurance, usually only a revocable subscription right is granted until the entitlement is reached. The employee should ensure that the subscription right is irrevocably granted from the time of vesting.
Insolvency risk:
If the subscription right is incorrectly still designed to be revocable in the event of insolvency, the insolvency administrator can cancel the direct insurance. The employee then has a claim for damages due to breach of the employer’s duty of care – however, he can regularly only file this claim in the bankruptcy court. In economic terms, however, this only results in a claim in the amount of the proportionate bankruptcy quota.
(finanztip.de)
Courtesy of www.finanztip.de.