Zillmerisation in the case of deferred compensation inadmissible

Liability potential in the billions for employers, as they are often allowed to “pay twice” for occupational pensions!*
*by Dr. Johannes Fiala, Lawyer (Munich), Mediator (Univ.), MBA Financial Services (Univ.Wales), MM (Univ.), Certified Financial and Investment Advisor (A.F.A.), Lecturer in Civil Law and Insurance Law (Univ. of Cooperative Education), Banker (www.fiala.de), Dipl.-Math. Peter A. Schramm, actuary DAV, expert for actuarial mathematics, publicly appointed and sworn by the IHK Frankfurt am Main for actuarial mathematics in private health insurance (www.pkv-gutachter.de) and Dipl.-Jur. Univ. Thomas Keppel, lawyer (Kanzlei Dr. Johannes Fiala)
In its ruling of March 2007, the Regional Labour Court of Munich clarified that the offsetting of acquisition costs in the first contribution years – in particular by zillmerisation – is not permissible in the case of occupational pension schemes by way of deferred compensation. Corresponding agreements are therefore invalid. Whether the employees were informed of this is irrelevant in this respect. According to the Munich court, even a settlement of acquisition costs over, for example, the first five years is ineffective. Salary conversion
An employee had made contributions to an inter-company provident fund via her employer for almost three years, waiving part of the salary to which she was entitled. 178 was paid into a life insurance policy taken out for reinsurance purposes. When the employment relationship then ended prematurely, a total of 6,230 euros had been converted into a company pension scheme (bAV). However, the surrender value of the insurance was only 639 euros. Almost 90 % of the money converted had thus been charged to acquisition costs in particular. This is considered common practice among insurers.
Clarification about zillmerization irrelevant
IIn the case decided by the Munich Regional Labor Court, it was unclear whether the employee had been sufficiently informed of the possibility of significant losses in the event of premature termination of the contract. The trial court had imputed this in an attackable manner. In any event, the employee had previously cancelled life insurance policies and suffered losses. An in-depth discussion took place with an insurance broker, but it remained open as to whether the employee was given documentation that included the initially low cash surrender values. At the trial, the employer was still wrong in law in taking the view that its former employee could at best address her claim to the provident fund or the insurer. The Regional Labour Court did not even address the question of sufficient information on the consequences of zillmerisation because this was generally inadmissible in the case of occupational pension schemes with deferred compensation.
(experts.com)
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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