Liability for occupational pension schemes ?

Explosive liability risks for employers – reduced benefits for employees !

“Today I bake, tomorrow I brew and
the day after tomorrow …” (Grimm’s fairy tale)

Uncertain pension

“The pension is safe” proclaimed the
Policy. This was followed by an appeal to
Citizens may want a second
The mainstay of old age, the occupational
(occupational pension scheme), in particular
through deferred compensation.
This form of saving also means
for the citizen a noticeable
Clever sellers, especially of
insurance products, used the
Favour of the hour. Employers were
masses of contracts worth billions
sold through high acquisition costs
in the first few years often
have no surrender value at all.
Acquisition and administrative costs
were paid out of the employees’ wages
fi nanced. What to do with a small salary conversion
with, for example
starts missing 2000 Euro, ends in the
Age with a defi cit in up to more
than 10 times the magnitude. For these
Difference sticks with something “bad luck” the

Insurers calculate with
uninformed customers

In the magazine Versicherungswirtschaft
…a department director…
Life insurance – even in corporate insurance business
active – on
the point: employers will
rarely sue for malpractice,
because “the facts are sometimes so
complicated that they themselves are tax
and pension consultants hardly discover
Insurers are protected
by “intransparency as well as the regular
long periods of time until detection
and judicial clarification of the
Liability Facts. … – a miscounseling
against this background
fundamentally difficult to prove.”
And the damage assessment
is “not easy and of future
Developments Dependent.”

Secure employer liability
the pension trap

The core problem is that almost everyone
Employer about the acquisition costs
has not been resolved. For the
Employee remains with average
seniority mostly
more “net” left over if he uses the money
taxed without the occupational pension model and
…in his bankbook.

Support from actuaries
as experts

The much vaunted “independent”
On closer inspection, the advice turns out to be
Audit in over 95% of cases as a liability trap
for employers. High administrative
and acquisition costs
later the balance sheet, up to insolvency.
As a rule, only one independent
Actuary (consultant) to show the employer
can determine which economic
Liability risks exist – the complex
Circumstances can be
but to make it transparent and to create a
Equality of arms with the only supposed
protected by non-transparency
product providers and intermediaries.
Actuaries are mathematically trained
Experts the questions
from the following areas
Insurance, building society, investment
and pension scheme with
mathematical methods of probability theory
and statistics
(actuarial mathematics, building society mathematics
and financial mathematics)
and find solutions for them under
Consideration of the legal and
economic environment.
The aim of actuarial activity is to assess
and evaluation of risks
as the insurance risks,
Investment risks and liquidity risks.
In general terms
an actuary deals with business processes,
in which mathematical or
statistical methods used
will be.
Further sources: Germans
Actuarial Association e.V.

Money-back from the sponsors of operational
Pension funds

The insurance intermediary shall take into
as a rule, personal trust is required
– also behind a mediation
GmbH, he cannot hide: He
is personally liable. But also the insurer
or a provident fund
are liable to the employer. A need for action
arises mainly because
the employer 30 years (limitation period)
answer to one’s employees
must – for the rest, however, after 10
years at the latest for the employer
the recourse against the intermediary
may be time-barred. Actuaries – who work with the
Calculation of such long-term contracts
with different performance components
are familiar – can
but the developing damage
still predict in time.
It is not uncommon for the expert opinion of a
Actuary and the cover letter from a lawyer,
for the complete reversal
to reach. For the employer
reassuring is that then also
Costs of the actuary or expert
(without the yes transparency and
Determination of damage usually not possible
are) and the remuneration of the lawyer
from the sponsor of the occupational pension scheme
are to be taken over: He is liable
also for its intermediaries, because these
shall be deemed to be his vicarious agents.

Success through competence

Day-to-day practice shows that an actuarial
Expert opinion
and a lawyer’s letter
usually suffice, so that
the damage suffered by the employer is compensated
will. There are already numerous
judgments – another may hardly be a
Insurers risk. In the end
the insurer with an insurance policy not
As long as the lawsuits – as the industry
is limited,
is therefore not considered from a business point of view.
reasons prefer to pay out of court
and avoid new relevant judgments.
The employers have above all
therefore quite good chances, because regularly
suspicion of fraud
by insurers and intermediaries in the
objective-criminal sense in the
employer as soon as he has been
actuary and lawyer about the existential
economic consequences of his
often touted as liability-proof
Models for occupational pension provision
has been cleared up. When intermediaries
it must be said that their
Misadvice hardly ever leads to liability suits
because they already have
the assessment of the loss by the insurer
are protected by non-transparency,
…you can’t find the thing that’s behind these contracts…
the economic risk involved.
The difference between a
theoretical and a realizing
Risk lies for the product provider
and intermediaries then only in the
Dr. Johannes Fiala, (

(Brennpunkt Handwerk 2/2007, 34)


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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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