Revocation is often also possible in the case of occupational pension schemes (bAV). It leads to immediate payment claims for employers, but also sometimes for employees and their creditors. This is bitter for the insurers, but the beneficiaries also often go away empty-handed.
Since a right of revocation still exists in large numbers today, an employer can still object to the life insurance policies taken out, both in the case of reinsurance (for pension commitments or direct commitments) and other occupational pension schemes (such as direct insurance and deferred compensation) and unwind the contracts. Insolvency administrators and creditors also have this option in the event of complete seizure, including all ancillary rights.
Also affected are contracts that have already been terminated, expired, already cancelled and repurchased not only because of earlier attachment, and contracts that are already in the retirement phase, as this does not prevent later revocation.
Economic advantage through revocation
The revocation would then also mean that all other agreements such as subscription rights, pledges and assignments of contractual insurance benefits would initially be deprived of their basis. At least if these refer to insurance benefits or surrender benefits, because these are not (no longer) available at all in the case of revocation and reversal. So the employee may initially go away empty-handed and the employer or insolvency administrator receives everything.
However, the (possibly former) employee will sometimes want to claim damages, for example if the revocation violates the employment contract or the occupational pension promise, which may not always be the case. Nevertheless, the benefit paid by the insurer (VR) to the employer after a revocation will regularly be significantly higher than the employee’s loss.
This also applies if the employee has left the company in the meantime or is drawing a pension from, for example, a direct insurance policy or deferred compensation – which then ends upon revocation. Where applicable, the employer must obtain credit for any amounts paid by the BoD.
Revocation after transfer of direct insurance to employees who have left the company?
If the employee later became a policyholder (UN), who is the right of withdrawal? In the case of an assignment by the employer to the employee as the new UN (e.g. for private continuation and contract payment), only individual claims are transferred – e.g. the contractual payment claim, which does not include the payment claim after revocation. Unless otherwise expressly agreed, the so-called ancillary rights (e.g. rights of structuring such as termination, rescission, revocation, cancellation opposition) remain with the original policyholder as contract-related rights of structuring.
Only in the case of a complete transfer of the obligation (assumption of contract), the (former) employee is also given the rights to determine the form of the contract, which generally also includes the legal rights after revocation (change of party). This requires contract interpretation and examination in individual cases (§§ 133, 157 BGB), because the usual forms for changing the policyholder transfer various (contractual) legal claims – the legal ones after revocation or objection, however, are not usually explicitly transferred in addition, because the form designer at the insurer had not even thought of this. Employers, creditors or insolvency administrators can thus deprive the employee of his occupational pension scheme before or after the start of his pension.
Need for tax and actuarial calculations
Reverse transactions must be calculated using financial mathematics and checked from a legal and tax perspective. However, there may be major advantages in terms of social security law and wage tax, because in the event of a reversal of the transaction, only capital gains tax (which can be offset at a later date) may be payable and social security contributions may not be levied at all in some cases – for example, unemployment and pension insurance contributions in the case of a company pension scheme severance payment (LSG Baden-Württemberg, 24.03.2015, Ref. L 11 R 1130/14).
For persons with direct insurance policies that are due to be paid out, this would be a current reason to consider legal evasion of tax and social security contribution obligations. For example, even in the case of disbursed direct insurance policies, a reversal after revocation can result in the obligation to pay income tax and social security contributions being waived for 10 years.
Revocation to remedy cases of employer liability
The legal entitlement to occupational pension payments is based on the commitment under labor law, the content of which an actuary can precisely calculate. The “cover” is provided – sometimes only partially – by life insurance policies, whose contractual benefits, including pensions already paid, have often been reduced by the insurer – sometimes and quite legally, except for the guaranteed values. Insurers have more than a dozen legal options available to them for this purpose, with the help of BaFin, if necessary also under guarantees already promised. In such cases, revocation is an option to increase the assets of the employer or employee.
For example, about 35 thousand euros were paid into a LV 2002-2015. The actuary calculated, among other things, the risk costs for this fund policy, the interest on equity (individually for each BoD), and the benefits drawn. On the revocation date in 12/2015, there were capital utilisations to be compensated of a good 40 thousand euros, plus 35 thousand euros of paid premiums, and a deduction for risk costs of around 8 thousand euros; thus an additional payment amount after revocation of over 67 thousand euros, or 25 thousand euros more than the surrender value of only 42 thousand euros.
Whoever revokes bears the burden of proof and demonstration for the actual use of the VR (BGH, judgement of 11.11.2015, ref. IV ZR 513/14). It remains to be seen whether it is against EU law (the so-called effectiveness requirement) if more than minimal investment fund losses are credited to the BoD as negative benefits. This also applies analogously to LV contracts since 01.01.2008, because today’s § 152 VVG nullifies the compensation for use of § 818 III BGB, because the VN does not receive more in case of revocation after one year than in case of termination and repurchase.
Even heirs – including those of the employer – can, pursuant to § 1922 of the German Civil Code (Bürgerliches Gesetzbuch – BGB), remember to still use a perpetual right of revocation for themselves, for example, to improve a widow’s and orphan’s pension. Other beneficiaries – even those who already have pensions in place – will then be left with nothing for the future.
by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm
by courtesy of
www.experten.de (published on 15.01.2016)
www.network-karriere.com (issue 2/2016 under the heading: Secure loss of occupational pension in the event of employer bankruptcy)
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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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