Germany’s Professional Association for Occupational Pensions (Arbeitsgemeinschaft für betriebliche Altersversorgung, or ABA) has called for a strengthening of occupational pension schemes across the continent.

The association said that in the context of various pension policy proposals, such as the BRSG 2.0, there was a need for occupational pensions to fill the gap left by a shortage of state provision. The remarks came during the IORP Supervisory Law Conference, yesterday, in Bonn, Germany.

Presenting at the conference, ABA deputy chairman of the board of directors, Dirk Jargstorff, said: "Occupational pension schemes in Germany are, or could be, the ideal solution for most employees to strengthen funded pensions."

Jargstorff referred to the current pension discussions being undertaken across the continent as various countries attempt to tackle an ageing population crisis.

He added: "It is absolutely necessary to link these debates with our common goal in the EU of ensuring an adequate retirement income. This objective is set out in the principle of retirement income and pensions in the European Pillar of Social Rights and all member states should work to implement it."

According to Jargstorff's assessment, a product shortage is not the cause of the still insufficient spread of funded pension schemes in Germany and other countries. He said that the EU's Pan-European Personal Pension (PEPP) product, which was created a few years ago at the insistence of the fund industry, has so far fallen well short of expectations.

The ABA made several demands, arguing that the federal government should target developing the existing occupational pension system. The recent development of the BRSG 2.0, it said, was a step in the right direction.

Also speaking at IORP was ABA chairman of the executive board, Dr Georg Thurnes, who said: “The strengthening of company pension schemes could be achieved more quickly through a higher subsidy rate for low-income support (§100 EStG), an instrument that addresses the root of the pension problem of many people with low incomes.”

He added: “An adjustment of the tax framework in Section 3 No. 63 of the Income Tax Act and the maximum limits under social security law with a significant increase or, ideally, a complete waiver of upper limits would facilitate the expansion and significantly reduce the complexity of occupational pension schemes. The tax framework for the transfer of pension obligations or pension entitlements from direct commitments by the employer or from provident funds to pension funds should also be improved."

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