Objections of the insurance industry – ruling of the LAG Munich (Gezillmerte Tarife bei Entgeltumwandlung)

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In its ruling of 15 March 2007, the Munich Regional Labour Court (Landesarbeitsgericht – LAG) decided that zillmerised tariffs are inadmissible in the context of employee-financed occupational pension schemes and that corresponding remuneration conversion agreements are invalid. The LAG based its decision, on the one hand, on the requirement of equal value contained in the German Company Pensions Act (BetrAVG) (Section 1 (2) no. 3 BetrAVG). The Zillmerisation in the case of deferred compensation also constitutes a violation of the prohibition of unreasonable disadvantage (Section 307 of the German Civil Code) as well as the basic idea of portability (Section 4 of the German Occupational Pensions Act). Moreover, zillmerised tariffs in employee-financed occupational pension schemes are not in line with the principles of the recent case law of the Federal Court of Justice and the Federal Constitutional Court, according to which the acquisition costs must be proportionate and must not frustrate the objective of capital accumulation. The insurance industry objects to this, arguing that higher maturity benefits can be achieved with zillmerised tariffs and that, if the employee is sufficiently informed, a private autonomous, voluntary (individual) agreement exists, so that §§ 307 et seq. BGB would not apply. In addition, the BGH had stated in the decision referred to by the LAG that the Zillmer procedure did not in principle constitute an unreasonable disadvantage within the meaning of § 307 BGB. Furthermore, it had to be taken into account that the legislator itself assumed the admissibility of offsetting acquisition costs in the context of the forthcoming amendment of the VVG. However, these arguments put forward against the decision of the Munich Regional Labor Court are not convincing. The statutory requirement of equal value cannot be circumvented on the grounds of an allegedly higher maturity benefit in the case of zillmerised contracts, especially since this would not achieve the portability and thus flexibility required by the Occupational Pensions Act for employees who work for an employer for an average of just under five years. Furthermore, even an express reference to Zillmerisation does not result in a general business condition becoming an individual agreement. Statutory provisions cannot be waived on a private-autonomous basis – provided that, in view of the lack of transparency of the products, there is any basis at all for voluntary private-autonomous decisions. The principle of equality of value is precisely one of the special features of employment law which, pursuant to § 310 para. 4 sentence 2 BGB are to be observed when determining the validity of a GTC clause. GDV ignores this in its comments on the decision. The cases decided by the BGH concerned life insurance contracts without reference to (employee-financed) occupational pension schemes. The BGH held that policyholders must be entitled to a certain minimum surrender value (just under half of the premiums paid) in the event of premature termination of the contract if the acquisition cost offsetting clause was non-transparent and thus invalid. This is because the BGH recognised that if you award more to one insured person in the collective, you have to pay less to another, because there is no more money overall – so a compromise had to be found. You don’t need that kind of compromise in employment law. According to the BGH, the acquisition costs must be proportionate and the objective of asset formation must not be frustrated. This case law was confirmed by the BVerfG. The considerations underlying these decisions must apply a fortiori when the employer converts remuneration due to the employee into a pension entitlement. Within the framework of the contract concluded by the employer with the product provider for the benefit of third parties, the choice of a zillmerised contract must therefore be avoided, as the objective of capital accumulation for old-age provision in the event of premature termination of the employment relationship (as a reminder: the average duration is not even five years!) is thereby rendered impossible, as the case decided by the LAG (EUR 6,230 in contributions paid in, after three years the surrender value of the reinsurance policy was only EUR 639) showed. In view of such case constellations, to speak of equal value on the basis of zillmerised tariffs, as GDV does in its statement, is therefore unconvincing and testifies to a lack of consideration of the reasons put forward by the LAG Munich for the ineffectiveness of zillmerisation in the case of deferred compensation. Nor can the effectiveness of corresponding regulations in the context of employee-financed occupational pension schemes be inferred from the fundamental permissibility of zillmerisation-like methods (zillmerisation in the narrow sense is no longer permitted by insurance contract law under the currently pending reform of the VVG) – e.g. over five years – under the VVG. Here, too, the insurance industry overlooks the requirement of equal value as a lex specialis that takes precedence in employment law. Therefore, contrary to the GDV’s opinion, it can by no means be assumed that the BAG will amend the judgment of the Munich Higher Labor Court in the event of an appeal by the defendant employer. Reasons for doubting this already result from the fact that the decision is based in essential points on the views of the presiding judge at the BAG, Dr. Gerhard Reinecke.
(experten.de (2007-10-05)
Courtesy ofwww.experten.de.

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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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