No obligation to provide information on taxes and social security contributions on occupational pensions

The Federal Labour Court (BAG, ruling of 18.02.2020, Ref. 3 AZR 206/18) decided that an employer did not owe compensation for damages simply because he had not correctly informed about social insurance contribution obligations at an information event, and simply because he did not even address the topic of social insurance.

 

Then he did not have to point out planned changes of the legislator in this regard, as his employee thought after years.

 

Only incorrect information will lead to liability of the employer

Thus, information can only be false if at least some information has been (also) provided. If the employer, without being obliged to do so (over-obligatory), provides any information or advice, he/she must vouch for its accuracy.

If, however, nothing is said at all on a (partial) topic, this is logically never accusably wrong, and as not even begun, it is not incomplete. Only advice and information provided should be complete and unambiguous (BAG, judgements of 13.12.1988, Ref. 3 AZR 322/87; and 23.05.1989, Ref. 3 AZR 257/88).

 

No right to comprehensive, only complete information

Employees have no legal right to be informed about all aspects of occupational pension schemes (bAV) on a purely voluntary basis. If social security contributions had been discussed to some extent in the specific individual case, the assessment would have been different.

Employees should not forget that the sales staff of insurance companies and credit institutions have no duty to advise employees. They are not financial or investment advisors to the employees, but to the employer.

Nevertheless, if they advise the employees (in the employer’s sphere of duties which may exceed the mandatory obligations) it may be a violation of the Legal Services Act – nevertheless, the employer is potentially liable for misrepresentations and the sales staff, for example in the case of intentional immoral damage.

Principle of autonomous personal responsibility and self-information by employees themselves

Employees are free to inform themselves about “risks and side effects”, for example in the case of deferred compensation – for this purpose there are wage tax assistance associations and tax advisors. Nor does an employer have to advise his employees “against himself” by pointing out his duty of care and obligation to assume responsibility, for example in the event of a future imbalance of the occupational pension fund (e.g. pension fund).

Neither does he have to inform employees that there are legal possibilities of company burial in order to escape the liability as an employer planned.

The employer is also not an investment advisor or pension advisor to its employees. Employers are only liable for culpably incomplete, ambiguous or incorrect information or advice (BAG, ruling of 21.11.2000, Az. 3 AZR 13/00).

The view that the employer is obliged to provide (unsolicited) advice would be a fallacy.

Employees should seek their own advice about financial disadvantages in old age – for example, the obligation to pay up to 100 percent of social security contributions.

The same applies if the legal entitlement to a reduced earning capacity pension, sickness benefit, unemployment benefit and old-age pension or benefits from the employers’ liability insurance association is already noticeably reduced by deferred compensation.

 

Employer liability in the case of a termination agreement

If there could be a threat of incapacity for work or occupational disability due to recognizable illness, the employer would be required to notify the employee of higher pension losses by means of a cancellation agreement (BAG, ruling of October 17, 2000, Case No. 3 AZR 605/99).

On the other hand, the employee must find out for himself how he could receive up to 50 percent of the severance payment tax-free by designing the termination agreement – without any financial burden on the employer. In case of doubt, he is liable (if applicable only) for his own legal counsel.

 

No obligation to inform about the possibility of deferred compensation

Tax consultants are also stubbornly spreading the “sales fairy tale” of the employer’s obligation to point out the option of deferred compensation, see § 1 a BetrAVG.

However, exactly the opposite is true (BAG, ruling dated January 21, 2014, Case No. 3 AZR 807/11). At the express written request of the (possibly former) employee, occupational pension funds or occupational pension institutions may be obliged to provide information on the amount of vested entitlements or the transfer value (cf. §§ 4 III, 4 a BetrAVG).

Incidentally, the employer’s obligations to provide information and clarification do not exist in general, but only according to the specifics of the individual case (BAG, ruling dated 15 October 2013, Case No. 3 AZR 10/12). The need for information, the complexity and difficulty of the legal matter, as well as the foreseeability of possible disadvantages for the employee also play a role.

 

by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm

 

by courtesy of

 

www.experten.de (published on 02.09.2020)

Link: https://www.experten.de/2020/09/02/keine-pflicht-zur-information-ueber-steuern-und-sozialabgaben-auf-betriebsrenten/?utm_source=newsletter&utm_medium=email&utm_campaign=20200902_experts+report_daily

Our office in Munich

You will find our office at Fasolt-Strasse 7 in Munich, very close to Schloss Nymphenburg. Our team consists of highly motivated attorneys who are available for all the needs of our clients. In special cases, our law firm cooperates with selected experts to represent your interests in the best possible way.


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.
»More about Dr. Johannes Fiala

On these pages, Dr. Fiala provides information on current legal and economic topics as well as on current political changes that are of social and/or corporate relevance.

Arrange your personal appointment with us.

Make an appointment / call back service

You are already receiving legal advice and would like a second opinion? In this case please contact Dr. Fiala directly via the following link.

Obtain a second legal opinion

The first telephone call about your request is free of charge.