The business model of renowned corporate consultants for occupational pension schemes (bAV) includes the provision of the reinsurance assets by means of a trust or double trust agreement.
\n(in the international context called Contractual Trust Arrangement or CTA for short) from the access of the insolvency administrator. This of medium-sized companies and even
\nFor years, the pension model that DAX companies like to use has been suspected of deceiving industry and small and medium-sized businesses on a commercial basis, because the Federal Court of Justice (BGH) has judged the legal situation differently.<\/p>\n\n
If the trustee becomes insolvent, the employer will generally not be able to demand that the trustee’s insolvency administrator segregate the existing collateral. If insolvency or bankruptcy protection were important, there would normally be no need for a trust model, but in rem security, for example by means of a pledge, irrevocable subscription right or Any creditor who has a title (e.g., a judgment) against an employer\/trustee, even without a title of his own, may proceed against the trustee by garnishment and By judgment of 26.04.2012 (file no. IX ZR 74\/11<\/a>), the BGH ruled: “A disinterested trustee is subject to a challenge of intent if he, after knowledge of the insolvency In addition, the transfer of assets to “disinterested administrative trustees” (e.g. a CTA) is already disadvantageous for creditors and can regularly be challenged. Fiduciary and double fiduciary models thus prove to be a clumsy deception about the fact that they do not protect assets in the event of insolvency, but actually the opposite. Already if the transfer of assets to a trustee is subjective (from the point of view of an employer\/trustee), possibly (dolus eventualis), inter alia, also It is not decisive that the trustee was already aware of impending insolvency at the time of transfer of the trust assets. Sufficient is already, Already the laying down of declarations of knowledge and motives regarding asset protection for employees, as usual in CTA models “in the event of insolvency as an open In its second guiding principle, the BGH states: “A disinterested trustee who pays out the debtor’s money obtained in a contestable manner to the debtor’s creditor in accordance with instructions is obliged to pay compensation for the value, (recently) without being able to invoke a lapse of enrichment.” The pension beneficiary benefiting from the trust model is liable to the insolvency administrator as a joint and several debtor – since he was unlawfully given preferential satisfaction as a creditor – and the trustee. In the internal relationship, the pension beneficiary is liable to the trustee.<\/p>\n If a group CTA trustee has to “pay twice” after the funds are paid to the employee, the trust assets of the other employers\/trustees are also put at risk of misappropriation or enforcement. The remaining employers\/trustees will feel deceived in retrospect about the content of the purported security provided by CTA\/trustee. This is because if the CTA trustee then becomes insolvent itself, even the solvent employers\/trustees regularly expect only a “bankruptcy rate” when it comes to the return of their trust assets.<\/p>\n\n “With the opening of insolvency proceedings against the assets of the trustor [Arbeitgebers], the trust agreement expires in accordance with the provisions of the German Insolvency Act. \u00a7\u00a7 115<\/a>, 116 InsO<\/a> and the trust assets fall economically If the insolvency administrator decides to approve this ineffective disposition of trust assets after the fact in order to spare the disinterested administrative trustee, If a CTA trustee pays out funds to (ex-)employees, the insolvency administrator has several options: As a rule, the parties involved (settlor, employer, trustee) will have to be assumed to have the intention to disadvantage the creditors. Even good faith on the part of the trustee and the beneficiary cannot prevent claims for reimbursement in the case of payments made after the opening of proceedings.<\/p>\n\n The Federal Court of Justice (BGH) repeated its case law on the liability of supervisory board members in the event of insolvency in its ruling of 16 March 2009 (Case No. II ZR 280\/07<\/a>): This makes it clear that supervisory boards are even obliged to examine the occupational pension conditions or to arrange for them to be examined by auditors, actuaries and legal advisors with regard to their content, including economic and legal security – also from the point of view of compliance and risk management. The Supervisory Board must also prevent CTA trustees who are presumably “legally meaningless and only costly” from collusively making any payment at the expense of other creditors. This is because such trust models are and were regularly “built on sand” from the outset in accordance with the law.<\/p>\n Thus, fiduciary models, double fiduciary or Contractual Trust Arrangements (CTA) are suspected of being used to promote contestable dispositions by fiduciaries. In many cases, trustees and dual trustees violate the Legal Services Act because they are not licensed, so that trust agreements and given powers of attorney Occasionally, the trustee does not have a licence for asset management (in regulatory terms: financial portfolio management) in accordance with the German Banking Act. \u00a7 32 of the German Banking Act (KWG) by the Federal In addition it comes that it is in view of the legal situation since 01.01.1999 in the InsO with such trust models in all rule around an intentional immoral damage of the From company practice, it can be seen that employees who have been granted a pension are not aware of these circumstances and are often precisely with the Trust models were developed under different legal conditions abroad in order to be able to balance the assets “outsourced” with the pension provisions. Training and further education in the area of occupational pensions is offered primarily to market participants whose “unqualified advice” is protected by the Legal Services Act (RDG). The BGH judges legal advice contracts with persons without a licence as null and void. In particular, these are seminars or, for example, a short course of study at a university of applied sciences to become a “bAV company consultant” for tax consultants and insurance intermediaries. Not infrequently, semi-skilled insurance intermediaries are used to advise customers, encouraged by prefabricated forms, with case-by-case sales support from the internal insurance service, and incentivised by high brokerage promises. In this context, the Federal Constitutional Court (BVerfG) has already ruled that the creation of new occupational profiles (“financial planner”, “succession planner”, “bAV company consultant”, “social security auditor for status determination and contribution reimbursement vis-\u00e0-vis the German pension insurance”) cannot avoid the need for legal advice. The appearance is maintained by the respective distributors and, by circumventing the UWG, the distributors are even encouraged to do so, In the same way, it is illegal for financial institutions (banks, structural distributors or insurance companies) to employ lawyers or tax advisors who work for them. This also applies if the chamber professional had previously worked on the occupational pension concept for the financial institution, for example as a cooperation partner, or had acted as a subcontractor of the financial institution. In the case of management – but also, for example, in the case of pension commitments for self-employed agents – the (partial) protection by the PSVaG does not apply at all, nor in the case of For true connoisseurs of the subject would have known that it has been considered immoral, frowned upon, ineffective, null and void for nearly a hundred years of high court legal history, The fact that employees’ pensions were not really protected under the CTA model in insolvency is usually less significant to employers than the CTA balance sheet. However, this standard is not complied with, because in the absence of insolvency security the assets are not exclusively available to the employees on a fully secured basis. However, in the absence of compliance with IAS 19.7, this means that the accounting is incorrect. Of particular relevance to employers and auditors is the fact that in many cases the requirements of IAS 19.7 for a CTA are not met, and that for years the CTA should not have been reported in this way.<\/p>\n As sensible as precautions may seem, it is difficult in today’s world for companies to foresee or estimate a period of more than 20 years. The The authors can only urge companies and their auditors to put the entire company pension scheme under the microscope, not in terms of a lawsuit, Managing directors, board members and supervisory board members are liable with their private assets
\nInstead, the employers as trustors must file their claims in the normal way in the insolvency table. The reason for this is that the trustee acts for the employer through
\npayment of insurance premiums or the purchase of investments. However, these acquired trust assets are not a so-called surrogate, i.e.
\nno longer the assets which the trustee had originally once received directly from the employer as settlor. The employer then only has a
\nnormal claim under the law of obligations against the trustee (BGH judgement of 18.07.2002, ref. IX ZR 264\/01<\/a>).<\/p>\n
\nAssignment.<\/p>\n\nBGH 2010: Trust assets unprotected in the event of enforcement against the employer\/trustee<\/h3>\n
\nExecute the transfer order. The claim of the trustor\/employer against the trustee arising from the trust relationship is then seized by the court, for example
\nthe (possibly future) statutory claims pursuant to \u00a7\u00a7 667, 812 of the German Civil Code (BGB) for the surrender of what has been obtained or the retransfer of the trust assets (BGH, decision of 22 April 2010,
\nAz. VII ZB 15\/09<\/a>).<\/p>\n\nBGH 2012: Acceptance of money and forwarding of money are each contestable in their own right<\/h3>\n
\nof the debtor passes on sums of money left to him in accordance with the agreement to certain creditors of the debtor who are to be satisfied preferentially.” Insolvency administrators can thus
\nten years to declare the challenge. Creditors also have this right of avoidance, for example if the opening of insolvency proceedings is refused for lack of assets.<\/p>\n
\nThe BGH states: “Consequently, it must be adhered to that already the surrender of funds to a disinterested administrative trustee of the debtor for his creditors
\ndisadvantageous.”<\/p>\n
\neffect – by making these pension assets “easy prey” for any insolvency administrator.<\/p>\n\nNo asset protection, but planned asset destruction through trust models<\/h3>\n
\nserves only indirectly to disadvantage the creditor and this is accepted as a mere presumed consequence, then it is subject to the following conditions in the event of the knowledge of the creditor
\nTrustee of the ten-year avoidance period, \u00a7 3 I AnfG<\/a>, \u00a7 133 I InsO<\/a>. This creditor disadvantage is, among other things, the declared purpose of the contract, both according to the CTA advertising
\nas well as according to the contents of usual CTA contracts.<\/p>\n
\nthat the CTA trustee knew “in the event of a security case” or “in the event of a disturbance” that an insolvency case already existed at that time and that he therefore had to fulfil his “instructions in accordance with the instructions (previously contractually)”.
\nagreed cash payment to allegedly secured employees” disadvantaged the other creditors. The Insolvency Code protects both existing creditors and future new creditors, so that any trust model is doomed to failure from the outset.<\/p>\n
\nmotive of the “security trust”, leads to the fact that on the one hand the transfer of assets to trustees and\/or double trustees is contestable for ten years in each case, and on the other hand
\nalso any disbursement “in the case of security”, because then the trustee knows that other creditors “by his instruction disbursements to by CTA contractual
\npreferred employees” are disadvantaged. Such assignments to fiduciaries prove to be unconscionable from the outset.<\/p>\n\nBeneficiaries of the trust agreement and trustee are jointly and severally liable<\/h3>\n
BGH 2012: Even a trustee acting in good faith is liable alongside beneficiaries from the commencement of proceedings<\/h3>\n
\ninto the insolvency estate.” If the bona fide, unsuspecting trustee pays on the instructions of the settlor\/employer after the opening of the insolvency proceedings, the claim of the insolvency administrator to the trust assets against the trustee is not extinguished, the trustee may have to pay twice, because the instruction of the settlor\/employer is invalid,
\n\u00a7 81 InsO<\/a>, as stated by the BGH (ruling of 12.07.2012, ref. IX ZR 213\/11<\/a>).<\/p>\n
\nthe insolvency administrator may also claim reimbursement from a bona fide recipient of trust assets. This is because the recipient of the payment is legally considered to be a non-entitled party, so that good faith is not even relevant, \u00a7 816 II BGB<\/a>.<\/p>\n\nCTA termination without notice to avoid losses as the safest route<\/h3>\n
\nBy contesting coverage, the InsO administrator will ask the employee for the money back.
\nThe insolvency administrator can also claim payment from the trustee or CTA trustee. The fact that the trustee acted “as directed” pursuant to an order does not help him escape liability.<\/p>\nSupervisory boards have a duty<\/h3>\n
\n“If the supervisory board determines that the company is ripe for insolvency, it must work to ensure that the management board files an insolvency petition in a timely manner and does not make any payments
\nThe Supervisory Board is not responsible for any actions that are inconsistent with the due care and diligence of a prudent and conscientious business manager. If he culpably violates this, he may be liable to the company for damages.”<\/p>\n
\nis being made. Such deliberately planned preferential treatment of creditors – in this case the pension beneficiaries – could also be punishable under \u00a7\u00a7 283 et seq. StGB<\/a> (German Criminal Code).<\/p>\n\nReversal of trust models for working time accounts and company pension schemes<\/b><\/h3>\n
\nare “null and void.” This could be triggered, for example, by advisory agreements on the CTA as well as a variety of contractual ambiguities and the trustee’s scope for decision-making.<\/p>\n
\nFinancial Services Supervisory Authority (BaFin). Financial portfolio management is any management of individual assets invested in financial instruments on behalf of others with
\nscope for decision-making (section 1 (1a) no. 3 KWG). The violation of such prohibition laws always means liability in tort, \u00a7 823 II BGB<\/a>.<\/p>\n
\nemployer as principal and the thus unprotected pension beneficiaries will act. Finally, it is foreseeable that domestic trust models in the unsuitable
\nAttempts to transfer constructs that may work in other legal systems to the completely different German legal sphere may have the exact opposite effect of what was intended:
\nThe reinsurance cover, for example for company pension schemes, will certainly fall into the insolvency estate in many cases.<\/p>\n
\ninsolvency security is advertised. In this context, employees usually have direct claims against the acting actors personally from the point of view of the contract with
\nProtective effect in favour of third parties. This increases the chance of old-age poverty for corporate bodies and investment sales.<\/p>\n\nloan fraud<\/h3>\n
\nand thus to show lower borrowings as liabilities in the balance sheet. This improves the rating and more favourable credit terms can be obtained from banks.
\nbecome more attractive for the shareholder, too, the investment in shares of the company seems to become more attractive. If, however, because of the specific German legal situation, the trustee model is not at all
\ncan function or is even ineffective and the conditions for the “accounting trick” are thus not met, banks and shareholders could feel cheated
\n– It would be difficult to avoid the consequences in terms of damages and criminal law.<\/p>\n\nDominant illegal organisation of the distribution of occupational pensions<\/h3>\n
\nand the constant jurisdiction of the BGH wants to protect the customers:<\/p>\n
\nactively promote this area.<\/p>\n
\n(chamber professional as so-called Syndikus) their customers legally and\/or fiscally to let advise. This was already decided by the BGH years ago (default judgment of 29.07.2009,
\nAz. I ZR 166\/06<\/a>): “An agency of another’s legal affairs, which is provided without corresponding permission, is not justified because the acting party uses the help of a lawyer.”<\/p>\n
\nor financial distribution. This is where reversal or liability for damages comes into question – a frequent topic after tax audits. Here too, from the point of view of
\nof compliance and risk management, above all by auditors, to examine whether the formal requirements were complied with when setting up occupational pension schemes, in order to exempt possible liabilities that only become apparent in the event of a claim from the liability of the executive bodies or to rectify possible deficiencies.<\/p>\n
\nTime value accounts. According to the new BGH ruling, the trustee must usually hand over these assets to the insolvency administrator without any ifs or buts. It is thus clear that fiduciary
\nand double trust models do exactly the opposite of what the financial sales force has come up with in this area by apparently inferior qualified personnel.<\/p>\n
\nwhen attempts are made to reduce the insolvency estate literally at the last second – with and without a trustee. The failure of the CTA initiators lies in the fact that at home and abroad
\nnot to look for alternatives that can be implemented on the basis of already established law and case law.<\/p>\n\nFalsification of balance sheets as the main purpose of the CTA models with significant liability of the auditors<\/h3>\n
\nFair value adjustments are made in accordance with the International Accounting Standard (valuation rules for balance sheets), specifically “IAS 19.7”.<\/p>\n
\nas IAS 19.7 would require – and in the event of the trustee’s insolvency (which is more likely with such flawed models) the employer can even segregate it,
\nwhich may not be permissible under IAS 19.7.<\/p>\n<\/h3>\n
Bottom line:<\/h3>\n
\nThe economic situation can change drastically during such a period, so that although the pension beneficiaries can be partially secured by means of security measures, on the other hand the companies reach the limits of their carrying capacity as a result of heavy burdens due to pay-as-you-go systems, such as the PSV.
\nIf one affirms a mature society and the set of rules of the valid laws, the old age provision becomes more and more in the area of responsibility of the individual citizen.
\nposed. According to the political will-building process, the farewell to the intergenerational contract is probably irreversible. In hindsight, this will be seen as one of the most successful
\nAppreciate lobbying work for the insurance industry. It remains to be seen whether the R\u00fcrup and Riester pension instruments will share this fate, or whether they will be seen as a “scrapping premium for statutory pension insurance”.<\/p>\n
\nbut to get certainty as another dimension.<\/p>\n\nHeads up:<\/h3>\n
\nFor representatives of corporations without sufficient expertise of their own, e.g. in the field of occupational pensions, there is an obligation to delegate to experts,
\nwithout encouraging prohibited legal advice. Due to the personal liability of board members and managing directors in the event of organizational negligence, the work results must be
\nexternal experts must be subjected to a careful plausibility check, as stated by the BGH (ruling of 20.09.2011, Ref. II ZR 234\/09<\/a>).<\/p>\n