Over half (59 per cent) of German pension fund representatives view greater legal certainty and reduced bureaucracy as the most important reforms the government can deliver, WTW Germany has revealed.

The research surveyed approximately 50 representatives from around 20 pension funds across a wide range of sectors at WTW Germany’s conference.

WTW noted that the results “send a clear signal” that while the political debate surrounding new funding models and product offerings is gaining momentum, practitioners are first demanding clarity regarding the existing rules of the game.

"Pension funds currently have to cope with a multitude of regulatory requirements, which tie up resources and complicate strategic decisions. For occupational pension schemes to become more widespread, the sector needs reliable and simplified rules," WTW head of retirement Germany, Hanne Borst, said.

The survey also found that the new coverage requirements were welcomed, with 37 per cent seeing it as a major opportunity, provided that the supervisory authority supports the implementation constructively.

The new regulations allow pension funds, for the first time, to tolerate temporary shortfalls in their security assets, a flexibility that previously was only available to pension trusts. Some funds are already in concrete discussion with the German Federal Financial Supervisory Authority.

Coverage requirements were followed in popularity by new funding through the Pension Reform Act and improvements to the social partner models, which each received 19 per cent of the vote.

Additionally, the survey showed mixed attitudes on Riester subsidies, a state-subsidised private pension scheme in Germany.

Beyond the funds that already offer Riester subsidies, nearly 40 per cent of participants see this form of support as an exciting opportunity. Meanwhile, 60 per cent of respondents are cautious about the new subsidies under the Pension Reform Act.

WTW said the industry is closely monitoring developments, particularly how competition with subsidised private pension contracts will evolve.

"The Pension Reform Act sets new impetus, but the crucial question remains whether the framework conditions are right for this impetus to be implemented in practice. Pension funds are ready to explore new avenues if the regulatory groundwork is laid,” Borst said.

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