Dr. Christopher Lohmann, the Talanx Group Board of Management member responsible for the Retail Germany Division, said: “This is a milestone for retirement provision in Germany. The social partner model is extending the opportunities offered by the capital market to occupational retirement provision as well. We feel this has enormous potential going forward, both for private customers and for our corporate clients, who can enhance their appeal to their existing workforce and on the labour market in general by providing attractive offerings.” Dr. Carsten Schildknecht, CEO of the Zurich Group in Germany, added: “The intensive negotiations with Talanx and ver.di have produced a blueprint that ver.di can also apply to other sectors in Germany. For the first time, there is now a basic framework that interested employers’ associations can take over so as to provide more people with access to occupational retirement provision using this channel. This also sends a clear signal to politicians.”
The future of retirement provision
“We find the product’s stability and security compelling and are delighted that the first social partner model has now been finalised. The model has proven its worth in the current coronavirus pandemic: its performance is stable and this has also cushioned it very well against the significant market volatility seen recently. Simulations since 2018 show that it was possible to keep target pensions on track through a combination of the product model and the smoothing mechanisms”, said Lars Golatka, Zurich‘s Head of Occupational Retirement Provision and CEO of Deutscher Pensionsfonds AG (the leader of the consortium behind “Die Deutsche Betriebsrente”). “In our opinion, this type of occupational retirement provision will be a key component of pension provision for future generations.”
“Die Deutsche Betriebsrente” now plans to leverage the momentum from its negotiations with ver.di to convince other employers’ associations and unions of the target pension concept. In Golatka’s opinion, politicians have a responsibility here: “We expect that low-paid workers will receive additional support and dynamised assistance for their efforts to ensure adequate retirement pension provision. Equally, the solution should be systematically opened up to companies outside the collective bargaining framework. The aim must be to continue reducing the complexity of current occupational retirement provision through automation and digital advisory services.”
Talanx launches first social partner model
Talanx Group employees in Germany will now be the first to gain access to the pure-play defined contribution scheme, giving them an extremely efficient potential way of providing for their retirement. In addition to employees’ deferred compensation contributions, the statutory employer contributions (15 percent) go towards accumulating the benefits. What is more, employers pay a supplementary coverage contribution on each euro paid in to the scheme, which serves as an additional security buffer for the scheme’s members. As a result, the social partner model offers a high degree of security even if no formal guarantees are permitted to be made. Low-income employees receive additional support. Fabian von Löbbecke, the Talanx Board of Management member responsible for occupational retirement provision who is jointly responsible for “Die Deutsche Betriebsrente”, said: “I am delighted that our Company has reached an agreement with ver.di. This is a breakthrough for social partner models in Germany and I am proud that this first collective agreement benefits our employees and that we are leading by example in this area. We can now use our Group to demonstrate the benefits of the new model to other interested organisations.”
This news release contains forward-looking statements which are based on certain assumptions, expectations and opinions of the Talanx AG management. These statements are, therefore, subject to certain known or unknown risks and uncertainties. A variety of factors, many of which are beyond Talanx AG’s control, affect Talanx AG’s business activities, business strategy, results, performance and achievements. Should one or more of these factors or risks or uncertainties materialise, actual results, performance or achievements of Talanx AG may vary materially from those expressed or implied in the relevant forward-looking statement. Talanx AG does not guarantee that the assumptions underlying such forward-looking statements are free from errors nor does Talanx AG accept any responsibility for the actual occurrence of the forecasted developments. Talanx AG neither intends, nor assumes any obligation, to update or revise these forward-looking statements in light of developments which differ from those anticipated.