*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)
Resourceful occupational pension consultancies advertise a pension commitment check: “We would be happy to carry out a professional check of pension commitments for you. In doing so, we also ensure that common deficiencies that occur in practice … are also identified.” With order the mediator receives questionnaires – unfortunately however thereby central risks are not recognized, because practice requires more than zig standard questions, rather individual case examination of all files is announced. In addition a few examples from practice: Welfare request after pension cheque: A customer operates a small GmbH – with pension promise are employed a GGF and its wife. Other employees and the cooperating daughter do not have pension commitments. Management consultant U. asks the intermediary to check the documents. U., the agent and the client think everything is OK. Unfortunately a mistake. When the client falls into insolvency, it turns out that there are numerous pension commitments and pledges, but unfortunately these are contradictory and incomplete – and the 30 or so reinsurance policies have already been partially terminated. The client discovers that the management consultant had unfortunately only received part of the files from the tax advisor for examination. Without pension the GGF now unfortunately social welfare request. Process financiers: The customer cannot enforce a pension with the insolvent GmbH. Several Prozessfinanzierer say without further, after above all neither the merry management consultant nor the tax counsel possess a permission after the law advice law according to information of the local district court president. The intermediary “hired” by the management consultant is horrified – he, too, should be liable, where he had only filled out the questionnaire and discussed the result with the client: no wonder, because after all he had received part of the remuneration and claimed the personal trust of the client – as a bAVxperte one sells better, after all. Hinterlergung: The pension commitment is no less problematic in the event of a company sale and anticipated succession. If the purchaser of the company later points out deficiencies or there is a dispute in the family with the heirs, the GGF together with the partner will be at the mercy of “his former” GmbH in terms of the pension commitment. If a dispute arises, the GmbH simply freezes the pension payments. Now the GGF gets the idea of asserting his lien, but again nothing comes of it: The insurer will hardly interfere in the dispute with the GmbH, and simply deposit it with the district court – GGF and GmbH can then calmly argue, and that can take time. Lawsuits can take a long time to reach the “highest court”, i.e. the court of last instance – 10 years of proceedings can be constitutional. The practitioner calls this the “judicial credit”. Social security claim after social security check: the client had also ordered a social security check at the time, through the intermediary at the consultancy. The expert checklists were processed, the text module expert opinion led to the desired success. The GGF and its wife received strong repayments from the legal old age pension insurance – and the mediator a commission from the following investment. But now it turns out that the advice was incomplete – for the spouses there would have been considerable advantages through voluntary contributions and other structuring measures. Had the advice been correct, the wife could draw a full pension earlier than at 65. The GGF could also draw a full pension after becoming disabled prior to insolvency – if he had been advised correctly. Both would have been able to draw their pensions earlier than promised (even if this is not stated in the pension commitment) for legal reasons, in addition to a statutory pension. The tax advisor is surprised, the mediator appalled: In his university documents on training as a financial planner, he looks in vain for the intricacies of social security and the creative details related to the bAV. No unemployment benefit despite social security check: But it gets even better – the daughter is also affected by the insolvency, the insolvency administrator gives her notice. No problem, she thinks, and reports to the employment office. The office replies “Thank you very much for your application, which we hereby reject”, because after examination by the employment office she was “exempt from insurance” – after all, she does not receive any benefits, only her contributions are refunded for four years (but only on application). The tax advisor is also liable in such cases, as the Regional Court of Cologne had already decided once years ago (Az. 16 O 6/93). Royal ways: Starting point of each organization is the analysis. The undertaking with check lists by an intermediary to let examine the pension promise, resembles a patient that would let itself operate by the nurse at the heart. Even with a doctor, treatment begins after a personal examination and consultation. This takes time, because checklists can hardly cover all conceivable cases, especially not when it comes to existentially complex legal and tax issues. Then the question of finances arises, and here above all the question of risk diversification. As an intermediary, you should have the client sign off on the fact that structuring the entire retirement provision through a single implementation channel is practically a cluster risk. Who would deliberately put all his eggs in one basket? Above all, if the customer must sign also that the optimistic advertising slogans over the insolvency protection of the pension promise originate from salesman wishful thinking and have little to do with practice. In each individual case, the customer must decide how much insolvency protection is desired. After all, there are also clients who can literally afford to do without it. Kanzlei Johannes Fiala Ingeborg Weiler public relations De-La-Paz-Str. 37 D – 80639 München Tel.: + 49 89 17 90 90 35 Fax : + 49 89 17 90 90 70 E.Mail: email@example.com www.fiala.de
(Press release rws.de (25.10.2005))
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About the author
PhD, 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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