Insurers are planning standardized company pension schemes for small companies

Black and Red want to expand company pension schemes. Currently, employees in larger companies mostly benefit from this. The insurers are now offering a product that is specifically tailored to small businesses - such as the snack bar.

The insurance industry has announced a standardized basic product for small and micro companies so that they can offer their employees a company pension plan (BAV). The deputy general manager of the General Association of the German Insurance Industry, Moritz Schumann, told the Funke media group that because of the complexity and liability, only one in four people in companies with less than ten employees have a BAV. "That's why we want to offer something standardized for these businesses - including the chip shop."

Company pension schemes are a “hidden champion”, especially in large companies, said Schumann. However, small and micro-enterprises lack a simple offer that can be implemented quickly. “The many design options often overwhelm them.” In addition, there is employer liability: it sounds daunting for a company to be responsible for future company pensions for decades.

“We therefore want to bring a basic product onto the market in which the employer is largely relieved of liability and effort,” announced Schumann. "The employer should be able to say: 'I offer a company pension plan, set up the contract once and pay my contributions.' Someone else will take care of the rest."

Currently, 52 percent of employees in Germany have a company pension plan. Most of them are employed in large companies that are organized through collective bargaining and therefore meet the requirements that unions and employers demand.

The government-appointed pension commission has suggested that measures be drawn up this year through dialogue with employers and unions to increase the spread of company pension schemes. They should then be passed by law. The aim is “an almost nationwide spread” of company pension schemes. Schumann also said that the new basic product for small companies should be offered as soon as there is clarity among politicians and social partners as to how company pensions can be made widespread.

For a long time, company pension schemes were a voluntary benefit provided by employers to their employees. Today, company pensions are often largely financed by the employee themselves - through so-called deferred compensation: parts of the gross salary or special payments are converted into pension contributions, plus a subsidy from the employer of at least 15 percent.