GERMANY - Corporate schemes are set to be play an increasingly important role in the future of European pension reform, according to Allianz board member Joachim Faber.
Talking on the final day at the congress on European Pensions: A Public - Private Partnership in Munich, Faber said that there was no “pan-European recipe for reform, but added that the German system had taken a “considerable step” in recent times:
All over Europe, the pay-as-you-go systems need to be complemented by funded pension plans. With the ‘Riester-Reform’, Germany has taken a considerable step towards a more balanced multi-pillar system. But more must be done to secure sufficient income during old age, he said.
Besides improving old-age provision, the German pension reform is also expected to stimulate savings and eventually lead to a broadening and deepening of capital markets and increase the competitiveness of the Germany economy, according to Faber.
Faber also argued that corporate pensions provision would prove more important in future.
“Corporate pensions plans reach a high percentage of the population and are a cost effective way of providing retirement income.”
Faber cited the creation of MetallRente - an institution offering pension plans for up to 4m employees in the German metal and electrical industries - as a “breakthrough” for company pension provision in Germany.
MetallRente started out as a joint venture between Germany’s biggest single trade union IG Metall and the Gesamtmetall Metalworkers Employers’ Association. In addition to Allianz Dresdner, the consortium managing the fund’s operations include life insurance firms Victoria Lebensversicherung and BHW Lebensversicherung and regional bank Westdeutsche Landesbank Girozentrale.
The three-day congress - the first of its kind - was organised by the World Bank. The event aimed to promote the understanding that the future state of benefits for future pensioners depends on a productive public-private partnership.
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