Almost half (49 per cent) of German companies see "major challenges" in coping with the administration and operational implementation of company pension schemes, according to research from WTW Germany.

WTW director of retirement, Ira Guttenberg, said the structures of these schemes are often “complex”, due to the large number of implementation methods, and as a result, the desire to streamline processes and reduce administrative costs is “correspondingly high”.

Reducing administrative burdens emerged as a key priority for many German firms in WTW's survey, followed closely by improving employee orientation.

WTW also found that risk reduction remains a priority for German companies, with over half indicating plans to reduce costs and balance sheet exposure.

Alongside this, greater financing of existing obligations and more strategic management of capital investments are high on corporate agendas.

At the same time, 55 per cent of German companies are looking to promote the use of online portals and digital tools to simplify processes and improve communication.

WTW Germany head of retirement, Hanne Borst, noted that “digital tools, transparent communication and flexible models will be decisive levers” in making company pension schemes more effective and employee-friendly.

“With the increasing importance of company pension schemes, companies are placing greater emphasis on design and implementation,” she said.

Guttenberg identified four main areas of focus: enhancing the employee experience, addressing employee needs, managing risks effectively, and reducing administrative efforts.

WTW has also observed a growing interest in innovative approaches such as opt-out models and personalised retirement planning.

Indeed, the study highlighted a trend toward making retirement planning more individual, with half of German companies planning to offer one-on-one meetings for personal retirement provision.

WTW found that in many European countries, the focus is on improving the employee experience, with around half of the companies surveyed citing this as a top priority.

Guttenberg added that in Germany, companies want their staff to better understand and actively engage with company pension schemes.

WTW suggested that this comes at a time when demographic change and growing uncertainty about the performance of the state pension make company pension schemes an “increasingly important” strategic instrument for companies to retain employees.

The survey also found that 75 per cent of German companies said their main goal is to use these schemes to attract and retain talent while ensuring adequate income in retirement.

The research also revealed a "clear knowledge gap" among employees, with only 17 per cent of German companies believing their employees know how much they need to save for retirement, compared with 23 per cent across Europe.

To address this, WTW emphasised the need for clearer communication, targeted advice, and initiatives to close pension gaps and strengthen employee trust in company pension schemes.

"Our study clearly shows that companies in all countries surveyed want to make the value of their company pension offers more visible. To achieve this, communication, digital solutions and individual advice must come to the fore even more strongly in the future,” Borst added.

Borst explained that in the future, the success of company pension schemes in companies will depend on whether it is possible to combine “tangible, employee-friendly pension provision with a sustainable reduction in risks and complexity”.

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