Findige bAV-Unternehmensberatung apply for a pension commitment check: “We would be happy to take over the professional checking of pension commitments for you. In doing so, we also ensure that frequent deficiencies that occur in practice (…) are also recognised”. With order the mediator receives ?questionnaires ?unfortunately however central risks are not recognized thereby, because the practice requires more than umpteen standard questions, rather individual case examination of all files is announced. Here are a few practical examples:
Social welfare application after pension cheque
One customer operates a small GmbH. A GGF and his wife are employed with pension commitment. Other employees and the cooperating subsidiary have no pension commitments.
Management Consultant U. has the broker present the documents for examination. All O.K. think U., the broker, and the customer. A mistake, I’m afraid.
When the customer goes bankrupt, a lawyer checks that there are numerous pension commitments and pledges, but unfortunately these are contradictory and incomplete ? and the 30 or so reinsurance policies have already been partially written back. The client noticed that the management consultant had unfortunately only received part of the files from the tax consultant for examination. Without a pension, the GGF must now unfortunately apply for social welfare.
The customer cannot enforce a pension with the insolvent GmbH. Several litigation financiers agree without further ado, especially since neither the cheerful business consultant nor the tax advisor, according to the local district court president, has a permit under the Legal Advice Act. The mediator “hired” by the management consultant is appalled. He, too, is supposed to be liable, even though he had filled out the questionnaire and discussed the result with the customer. No wonder, however, since he had after all received part of the remuneration and had taken advantage of the customer’s personal trust – after all, as an occupational pension expert one sells better and better.
No less problematic is the pension commitment in the event of the sale of a company and anticipated succession. If the buyer of the company later on makes shortcomings apparent or if there is a dispute in the family with the heirs, the GGF and the partner in the pension commitment are “on the drip” of their former GmbH. If a dispute arises, the GmbH simply freezes the pension payments. Now the GGF gets the idea to assert its lien, but again nothing comes of it: The insurer will hardly interfere in the dispute with the GmbH and simply deposit it at the district court. GGF and GmbH can then argue in peace and quiet, and that can take time.
Incidentally, insurers behave similarly if a dispute arises between the GGF and the insolvency administrator. Complaints up to the “last court”, spirch the last instance, can last: 10 years of proceedings can be constitutional. The practitioner calls this the “justice credit”.
Social assistance application after social security check
At the time, the client also had a social security check, through the intermediary of the management consultancy. The expert checklists were processed and the text module appraisal led to the desired success. The GGF and his wife received substantial repayments from the statutory pension insurance – and the intermediary received a commission from the subsequent investment.
But now it turns out that the advice was incomplete ? there would have been considerable advantages for the spouses through voluntary contributions and other creative measures.
If proper advice had been given, the wife could receive a full pension earlier than at 65. The GGF would also receive a full pension after becoming disabled before the insolvency – if it had been advised correctly. Both of them would thus have been entitled (even if it is not in the pension commitment) for legal reasons to receive their pension earlier than promised in addition to a statutory pension.
The tax advisor is surprised, the agent horrified: In his university documents for training as a financial planner, he looks in vain for the finer points of social security and the design details in connection with the occupational pension scheme.
No unemployment benefit despite social security check
But it gets even better – the daughter is also affected by the insolvency, the insolvency administrator gives her notice. No problem, she thinks, and contacts the employment office.
The latter responded in the sense of “Thank you very much for your application, which we hereby reject”, because after examination by the employment office it was “exempt from insurance”. Finally, she receives no benefits, only for four years her contributions are reimbursed (but only upon application). Also in such cases the tax consultant is liable, as the LG Cologne had already decided years ago (Az. 16 O 6/93).
The starting point of any design is analysis. Using checklists to have the pension commitment checked by an intermediary is like having a patient undergo open-heart surgery by a nurse.
Even at the doctor’s, treatment only begins after a personal examination and consultation. This takes time, because checklists can hardly cover all conceivable cases, especially when it comes to existentially complex legal and tax issues.
Then there is the question of finances, and here above all the question of risk diversification. The intermediary should obtain the customer’s signature that making the entire pension provision through a single implementation channel practically means a cluster risk. Which customer deliberately puts everything on one card?
Especially if the customer also has to sign that the optimistic advertising slogans about the insolvency protection of the pension promise are the result of wishful thinking on the part of the salesperson and have little to do with practice.
In each individual case, the customer must decide how much insolvency protection is desired. After all, there are customers who can literally afford to do without it.
by Dr. Johannes Fiala
published in AE Labour Law Decisions 04/2005, page 207-208
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About the author
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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