The German government wants to lay the groundwork for industry-wide pension plans with more flexible promises, following studies showing that many employers were shying away from offering pension plans because of the long-term liabilities and the required top-up payment for guarantees.
The introduction of reine Beitragszusage (pure contribution-based pension plans) aims to provide full cost and planning certainty for employers with regards to their pension liabilities.
The law will now go into the consultation phase, as it would require several existing legal frameworks to be amended. If the draft is approved by all stakeholders and parliament, it is scheduled to come into effect from 2018.
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