An attractive company pension plan (bAV) is a key tool for attracting new skilled workers and retaining them long-term, according to a new study from Lurse.

It examined open pension plans from 61 large and medium-sized companies in all major industries in Germany.

Lurse found that, from a corporate perspective, the importance of company pensions as a tool for employee recruitment and retention was steadily increasing.

Eighty-five per cent of respondents rated their importance as high in the future, and two-thirds rated it as very high.

Company pensions were primarily viewed as an additional benefit within a total compensation package.

"Company pensions remained a decisive factor in attracting and retaining the best talent, especially in skilled labour shortages," said Lurse managing partner, Miroslaw Staniek.

"Companies that offered their employees compelling benefits in this area secure a clear advantage in the talent competition."

Options regarding the benefit and payment method also increased the attractiveness of company pension plans for employees, as they allowed them to tailor their benefits better to their individual needs.

Options were prevalent in arrangements that required employee contributions, such as employee-funded and matching plans.

Of the company pension plans surveyed, whether employer- or employee-funded, 40 to 60 percent offered optional additional benefits such as survivors' and disability pensions.

Regarding the payment of retirement benefits, 46 to 67 per cent of plans also offered a choice between a lifelong pension, a lump sum payment, or instalment payments.

In terms of payment options, a slightly higher prevalence of lump sum payments was observed across all funding sources compared to 2021.

However, half of these arrangements did not provide instalments but only for one-time lump sum payments.

"Lump sum payments offer significant advantages for employees and employers," explained Miroslaw Staniek.

"They are attractive for employees because they are flexible and immediately available, while companies reduce long-term liability risks thanks to the faster reduction of provisions," he added.

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