– Pension capital transfer or change of policyholder – decision between plague and cholera –
In purely statistical terms, the length of service of an employee is just under five years. If the employee has a pension plan, he or she will be able to take it with him or her to the new employer,
but only if the old and new employer agree to this, § 4 BetrAVG.
Transfer of the pension capital
The transfer of the pension capital is the classic way, in which the new employer issues a new occupational pension commitment in addition to the new employment contract.
According to the so-called portability agreement, the transfer value of a direct insurance, a pension fund or a Pensionskasse can be transferred.
Section 4 of the BetrAVG also applies to the transfer value of a pension commitment and a support fund. The employee would be entitled to deferred compensation.
In many cases, it is only now that employees realise, when the occupational pension insurance is terminated, that it was already a loss-making business, because in many cases only the following is transferred
up to less than half of the deposits. Later, when pensions or lump sums are paid out, there is often an additional tax burden, including the frequent obligation to pay
still have to pay contributions to the statutory health insurance. Until payment is made, entitlements to sick pay, statutory pension and unemployment benefit have also been reduced.
Those who do the math often find that it would have been cheaper to have the money paid out through payroll deductions to invest themselves.
Secure further losses through new insurance rates
In many cases, the new employer will only be able to conclude insurance contracts with a lower guaranteed minimum interest rate, combined with new acquisition costs.
This is because lower interest rates mean lower guaranteed benefits for the employee, but also lower liability for the employer. For the employee, even a new direct insurance policy is foreseeably a losing proposition, because the investment income is simply eaten up by administrative costs and inflation. Not every employer is willing,
to structure the contracts in such a way that, for example, provision is made for surviving dependants and in the event of occupational disability. The insurance rates are particularly disadvantageous
since 23.12.2012 when male employees are insured, because since then they receive up to more than 20% lower benefits from so-called unisex tariffs.
The employer could avoid this not only by choosing an insurer that is not based in political Europe.
Unisex not mandatory in the occupational pension system
In occupational pension schemes, the unisex tariffs, which are unfavourable for men, are not mandatory. Thus, employers can find providers who continue to offer gender-based rates here. However, even unisex calculation would only be required at the level of an employer or, for example, a group of employers.
Large employers with an excess number of men can thus obtain more favourable unisex rates for their employees as a collective agreement than the normal individual insured. Alternatively
it may be worthwhile for the employer to take advantage of a collective offer from a group of employers who, for example, as an industry, have a larger proportion of men among their workforce
show Employers who make the search for suitable offers too easy can quickly find themselves in a liability situation due to unfavourable provisions.
Change of policyholder as an alternative?
In the case of a change of policyholder, the new employer enters into the insurance contract concluded by the old employer. The new employer often does not suspect,
that he thus assumes responsibility for the selection of the carrier of the occupational pension scheme (tariff, insurance, provident fund, pension fund, etc.), and any deficits in the
Equality of value continues. Usually, the previous commitments to simplification are then also taken over by the new employer, including any additional
legal design errors and liability risks. If the old occupational pension commitment was already not equal in value, the transfer value will often be so even in the case of a change of policyholder.
…or you. Some insurance companies support the change of employer with a bAV commitment by means of collections of forms which, of course, are not automatically
are liability-proof, and do not relieve the employer of legal obligations.
No freedom from liability for old and new employer
No employer can be certain that any commitment will ever be equal in value as required by law, whether at commuted pay or at transfer value.
No freedom from liability is promised to the employer by law. The employee’s claims against the old and the new employer regularly become time-barred after up to 30 years, calculated from the start of the pension. There is no statutory type of commitment under the Occupational Pensions Act that releases the employer from its responsibility.
The legislator could have left it up to the employees, similar to the capital-forming benefits, that the employer with the least responsibility only
Payment to a savings contract takes over. In the case of occupational pensions via life insurance, almost all employers fail to mention that there is about half a
Dozens of ways exist to reduce insurance benefits even retroactively to well below the guaranteed benefits. Set pension funds or pension funds
their benefits are later reduced in accordance with the Articles of Association, the employer will also be liable for any differences – likewise if they are not equal in value from the outset, or
this at the latest with an early premium waiver or reduction. A total loss has already occurred in the case of a provident fund whose capital was embezzled,
and an industrial pension fund whose assets were irretrievably transferred to a tax haven by hackers. The employer is liable – even if it seems to him
Alternatives without insurance coverage and without crediting in old age
The questionable return on investment from an employee’s perspective, and employer liability piling up over time, suggest looking for alternatives. For employees this can
The best solution is simply to optimise the tax burden at the present time and to have the entire occupational pension benefits paid out today. For employers there is the alternative
The company’s own statutory liability under the German Occupational Pensions Act must be avoided like the devil avoids holy water in the case of occupational pension schemes. With solutions organised in the form of insurance
off the peg, this can certainly hardly succeed. With offers of employee capital participation for asset formation or pension schemes organised via foundations
outside the occupational pension system, however, it will be possible to minimise the demand for deferred compensation that is subject to liability.
The mass of employees have the best prospects of old-age poverty and a basic security pension that has to be applied for every year – and this also applies to higher income brackets.
hardly a chance of maintaining anything like their standard of living in old age. At the same time, many people’s current decision to forego consumption through Riester savings will lead to absolutely no improvement in the level of provision later in old age. According to statements by the federal government, however, it is in any case an adequate old-age provision if at least no social assistance has to be applied for in old age.
Some employers have already realised that it is therefore a good idea to organise a supplementary pension scheme on a charitable basis, for example through a foundation, for employees in such situations as a matter of welfare. The advantage for the employer may be tax-related, for the employees the advantage is more flexible benefits. In this way, company loyalty up to the start of the pension can also be rewarded far better by means of vesting rules that deviate from the German Company Pensions Act, thus achieving a stronger commitment effect than in the usual occupational pension solutions. Particularly as there is a conflict of objectives here with better mobility of employees demanded from the EU point of view, which will soon be expressed in vesting periods shortened to three years.
by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm
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Über den Autor
PhD, MBA, MM
Dr. Johannes Fiala ist seit mehr als 25 Jahren als Jurist und Rechtsanwalt mit eigener Kanzlei in München tätig. Er beschäftigt sich unter anderem intensiv mit den Themen Immobilienwirtschaft, Finanzrecht sowie Steuer- und Versicherungsrecht. Die zahlreichen Stationen seines beruflichen Werdegangs ermöglichen es ihm, für seine Mandanten ganzheitlich beratend und im Streitfall juristisch tätig zu werden.
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