by Johannes Fiala, Lawyer (Munich), M.B.A. (Univ.Wales), M.M. (Univ.), Certified Financial and Investment Advisor (A.F.A.), EC Expert (C.I.F.E.), Banker (www.fiala.de) bAV-Handelsblatt-Forum: Void conversion of remuneration Dr.Reinecke, chairman of the pension senate at the Federal Labour Court (BAG), has dropped the bombshell. His core statement is that contracts for the implementation of company pension schemes can be (partially) null and void. Insurance brokers are surprised ? have they been brokering invalid contracts for years? The Federal Labour Court is merciful and just? The chairman is merciful, because he announces how he will decide – against employers and thus also against intermediaries. Many intermediaries ignore the message ? after all, everyone (habitually via commission) needs something to live on. Banks are also entangled in this cartel of commission orientation. The problem that deferred compensation could be void, and thus also legally linked the contracts with insurance companies for reinsurance or outsourcing, has long been known. But the product providers’ sales advertising has often brushed this aside. The intermediaries will be the first to suffer, and before that, of course, the employers. bAV fee advice: And now it comes down to the details. Conclusion costs (commissions) and too high administration costs, as well as a ?Zillmerung? could offend against the requirement of the value equality. In the company pension law (BetrAVG) this is regulated, not only since yesterday. The advertisement of the product givers looks at this legal requirement only recently more exactly. And already the advertising machinery runs, it is not so bad everything ? is concealed, with which the justice concerns itself already longer. Because Dr.Reinecke is by no means the only labour judge who comments on the equality of value. The risk of punishment: let’s think about it objectively. There is the knowledge that the employee can demand a company pension. He is entitled to it because the legislature has made it so. This entails costs and liability for the employer ? as is natural for the whole area of payroll accounting. As far as taxes are concerned, bAV arrangements are usually advantageous at present. In this legal game, the employer is a trustee of the assets/wages of his employees, because he determines ?the implementation method and the tariff? The view into §§ 266, 266a StGB is gruesome ? Unfaithfulness threatens (the employer, and the intermediary from the point of view of instigation and aiding and abetting). Dr.Reinecke did not put this with any word into the room. But connoisseurs of the matter know what and for whom the hour might have struck. Arrogance of an insurance executive? Then a broker reports ?everything half so wildly; yesterday I spoke with the executive committee of the Pfefferminzia, and it will call in the Kanzleramt, so that this is repaired ? The liability suits against brokers show that employers have no understanding when they feel deceived. Many intermediaries know the situation when they are sued and their product provider first “drops them cold”. Consultation deficits: There are omissions of the legislator, above all if ?indeterminate legal terms? stand in the law. Here the judge may then create new law. One of these is “equality of value”. Such a thing is a risk, for all involved ones ? here thus the employer and the financial advisor, up to the punishability, and there a threatening back completion weighs nearly far less. Who has already informed the employer that it is completely unclear whether an insurance company is allowed to ?zillmern? or otherwise charge any administrative costs and commissions? Clarification is announced also here for years (BGH judgement of 20.10.2005), also for the mediator. But which mediator received already from its product giver to the value equality a de-liability information? At the end (again?) times the one or other mediator is condemned and leaves the market? Tax adviser liability: Also the tax adviser does not go it better than the mediator. A tax consultant had to recognize recently by the BGH judgement mentioned that over the uncertainties of the interpretation of an indeterminate legal concept, as it is the value equality now times, to clear up is. This is nothing new, but in which sales training was this dealt with? For the intermediary, but also for the tax advisor, it is questionable whether the VSH insurer is liable in such cases. Because if (as here?) legal prohibitions are possibly violated, no VSH insurer will pay. Ask your VSH broker, because a violation of the requirement of ?equal value? is usually uninsurable. Tax advisors have another problem: How is an (undetected?) ineffective salary conversion treated in payroll? The intermediary is almost always on board?! Deception by product providers? An federation gave it now on its Internet side, the federation of the independent ones (BVD): Here it is made clear that entrepreneurs can lose their entire operational old age pension after the ?pledge model of the insurance industry? in the insolvency. Only this finding does not lead to the goal for the mediator. Also in this point a substantial reorganization need exists to repair unhappy arrangements, naturally paid. Rethinking with the selling: For the mediator it concerns today to recognize that fee consultation is promising for the future. Intermediaries are still trying to earn their money in occupational pension consulting with commissions. The risk of civil and criminal liability is great. For risks and side effects, ask your legal advisor ? but (just don’t) your broker advisor? Employer liability as a door-opener: Mass remediation is apparently required in the bAV because of the violation of equal value. The reason under employment law is the breach of duty of care, because the employee’s claim against the employer under employment law is usually higher than the claim against the insurer involved under insurance law. A discussion with trade unions or works councils, perhaps the gentle hint at the objective criminal offences of §§ 266, 266 a StGB, can help to open up this market. Or you ask how the tax advisor has managed to treat (partially) ineffective deferred compensation for tax purposes over the years? Even if some insurers have so far unsuccessfully tried to refute Dr. Reinecke ? his statements reveal an existential need for advice as a sales opportunity.
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About the author
Dr. Johannes FialaPhD, MBA, MM
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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