Pensionskassen insolvency reform to impact on occupational pensions

first_imgThe reform of the Betriebsrentengesetz, the law that protects German Pensionskassen in case of an employer’s bankruptcy, can have an impact on the appeal of occupational pensions, according to consultants.Under the new rule, employers are required to contribute to the equalisation fund set up by the mutual insurance association for German occupational pension schemes, the Pensions-Sicherungs-Verein VVaG (PSV).Contribution are calculated in 9‰ (promille), which takes into account the rate for 2021, set at 3‰ (promille), and an additional contribution of 1.5‰ (promille) for the years 2022-2025.“The employer has to pay the contribution to the PSV, but the PSV will step in only if the Pensionskassen cannot pay pensions in full and the employer is insolvent,” Kai Lehmberg, consultant for policy matters at the Hannoversche Kassen, told IPE. Employers will reconsider how and if to continue to provide occupational pensions, he said.“In this case we will have to see what kind of consequences the reform will have on occupational pensions.”BaFin, the Federal Financial Supervisory Authority, has 36 Pensionskassen under intensive scrutiny, according to a reply from the German government to a parliamentary inquiry, and has already approved applications to cut pension benefits filed by seven funds.With the reform, the legislator decided to widen the scope of the PSV for regulated Pensionskassen precisely given the difficult situation that retirement funds navigate, said Michael Ries, managing partner at Ries Corporate Solutions.But, he added, the reduction of benefits by Pensionskassen will lead to problems for sponsor companies, which will have later on to compensate for reductions and pay contributions to the PSV.“This is catastrophic for the Pensionskassen, and will be fatal for the acceptance and the appeal of occupational pensions,” Ries said.“This is catastrophic for the Pensionskassen, and will be fatal for the acceptance and the appeal of occupational pensions” Michael Ries, managing partner at Ries Corporate SolutionsEmployers that run occupational pensions through regulated Pensionskassen will have to pay contributions to PSV on top of the normal contributions for old-age provisions.“The legislator wants to have the highest level of security, and it is the only way that makes sense because the alternative is the liability of state, and that is not a viable realistic alternative,” Lehmberg said.He added that, however, further contributions may lead employers, in particular small firms, to consider whether to provide occupational pensions through Pensionskassen.Unfair treatmentHannoversche Kassen has adjusted the interest rate for future benefits because it cannot always guarantee to generate 3% return, and make promises that won’t be able to keep, Lehmberg said.“We have the possibility to react flexibly and to generate for the future what we have promised,” he said, but employers pay the same amount of contributions for Pensionskassen that have taken, or have not taken risks.“It is unfair that all regulated Pensionskassen are treated the same way even though some are financially well in shape and others not so financially well equipped. The reform does not close this gap and all regulated Pensionskasse are disadvantaged,” he said.The reform extends the protection provided by PSV to company pensions organised through Pensionskassen, excluding public sector schemes and company pensions organised through funds that already fall under the Protektor Lebensversicherungs, the guarantee scheme for German life insurers.Hannoversche Kassen believes the Protektor Lebensversicherungs is not as well equipped as the PSV.“If the employer manages the occupational pension through a Direktversicherung (direct insurer) and the insurer struggles financially, then the protektor steps in. The Protektor does not have to pay full pensions in special cases, and the difference has to be paid by the employer. The protector system is not always beneficial,” Lehmberg said.Through the reform, the legislator has changed the insurers’ contract formula, or versicherungsvertragliche Lösung, which gave employers the possibility to limit the number of claims from an employee that decided to step out early from an occupational pension organized through a direct insurer.“We welcome this part of the reform because it gives planning security, and there will not be litigation between the parties,” Lehmberg said.For Ries, instead, the employer remains liable to compensate  the Pensionskasse’s reductions of benefits.“The legislator wants to reinforce the cover of the beneficiaries but impacts the reputation, the appeal of the occupational pension and will reach the opposite result of that of the Betriebsrentenstärkungsgesetz. It will be a catastrophe,” he said.Looking for IPE’s latest magazine? Read the digital edition here.last_img read more

CONSISTENT MAXIM RATE HEADS SATURDAY’S GRADE III, $150,000 HONEYMOON STAKES

first_imgCONSISTENT MAXIM RATE HEADS SATURDAY’S GRADE III, $150,000 HONEYMOON STAKES AS EIGHT SOPHOMORE FILLIES GO 1 1/8 MILES ON TURFARCADIA, Calif. (May 29, 2019)–A nose shy of being undefeated in three starts, trainer Simon Callaghan’s Maxim Rate bids for her second consecutive graded victory as she heads Saturday’s Grade III, $150,000 Honeymoon Stakes at Santa Anita. For 3-year-old fillies at a mile and one eighth on turf, the Honeymoon has attracted a field of eight, including stablemate Hostess and the Richard Baltas-conditioned Lady Prancealot, both of whom were narrowly beaten by Maxim Rate when last they met.MAXIM RATEOwner:  Slam Dunk RacingTrainer:  Simon CallaghanA first-out one mile maiden turf winner from off the pace on Feb. 16, she was second, beaten a nose from off the pace in the Grade III, 1 1/8 miles Providencia Stakes on April 6. In her next out, Maxim Rate pressed the pace en route to an impressive half length win as the 6-5 favorite in the Grade III, one mile turf Senorita Stakes, a race in which Lady Prancealot finished second and Hostess checked in fourth, beaten 1 ¼ lengths. By Exchange Rate out of the Unbridled’s Song mare Catch My Eye, Maxim Rate will be ridden back by Kent Desormeaux.LADY PRANCEALOTOwner:  Donald Durando, Jules Iavarone, Michael Iavarone & Jerry McClanahanTrainer:  Richard BaltasBest suited as a deep closer, she finished strongly from way off the pace to finish third, beaten a head by Hostess two starts back in the Providencia on April 6 and finished well at 5-2 to be second, beaten a half length by Maxim Rate in the one mile turf Senorita on May 4. With a larger field and the prospect of a hotter pace, this Irish-bred rates a big chance stretching out a furlong with Joe Talamo riding back. Easily the most seasoned Honeymoon runner, Lady Prancealot took one out of five starts in England and is now 12-2-4-2 overall with earnings of $129,341.HOSTESSOwner:  Mr. J. Warren StableTrainer:  Simon CallaghanOne for three in her native England, Hostess came rolling to take her U.S. debut, the Grade III Providencia two starts back on April 6 and like Lady Prancealot, would appreciate a hot pace in the Honeymoon on Saturday. Off at 7-2 in the one mile turf Senorita on May 4, Lady Prancealot just nipped her for third money by a nose with Brice Blanc up. In what will be her third Santa Anita start, Hostess will be reunited with Drayden Van Dyke, who was up for the Providencia win.THE GRADE III HONEYMOON STAKES WITH JOCKEYS & WEIGHTS IN POST POSITION ORDERRace 7 of 9 Approximate post time 4 p.m. PT Lady Prancealot–Joe Talamo–120Over Emphasize–Alonso Quinonez–120Seranitsa–Flavien Prat–120Holly Hundy–Norberto Arroyo, Jr.–120Dr. Wysong–Aaron Gryder–120Maxim Rate–Kent Desormeaux–124Sold It–Mario Gutierrez–122Hostess–Drayden Van Dyke–124First post time for a nine-race card on Saturday is at 1 p.m. For additional information, please visit santaanita.com or call (626) 574-RACE.last_img read more