Dr Georg Thurnes - Chairman of the aba -Arbeitsgemeinschaft für betriebliche Altersversorgung e.V.
2024 is a year of anniversaries: The BetrAVG, which came into force on 22 December 1974, is celebrating its 50th birthday, the PSVaG celebrated its 50th anniversary on 7 October with exciting discussions, and the aba has - as usual - supported occupational pension provision with trenchant statements on draft legislation and with commentaries on developments.
VEDRA Pensions is taking the opportunity to talk to Dr Thurnes about this very subject:
1. In May 2025 you will hand over the chairmanship of the aba Executive Board to Beate Petry of BASF SE at the next Annual General Meeting - you arranged this succession early on yourself. Are there tears or smiles?
Occupational pensions and the aba have been close to my heart throughout my professional life. That's why I'm delighted that a company like BASF, with its long tradition and sense of responsibility in the area of company pensions, is continuing to support and promote aba. Beate Petry is an excellent successor with a great deal of expertise and commitment to developing and supporting my passion for occupational pensions. I have two smiles on my face! I will be staying with aba and bAV beyond May 2025. It's much too early for any kind of farewell pain.
2. 50 years of BetrAVG - the amendments to the 2. Betriebsrentenstärkungsgesetz are still under discussion. In your opinion, a successful amendment or a failure to achieve the class goal?
I would say neither. Unfortunately, you could say that a class target is not clearly defined anyway. The planned measures are all good and we support them. We would certainly have liked to see more in some areas, but this always has to be seen against the background of political feasibility and - from the point of view of those in power - financial feasibility. For the most part, the measures are positive for occupational pensions and represent many steps, large and small, in the right direction.
3. You took part in the discussion on "Quo Vadis pensioner companies" at the event to mark the 50th anniversary of the PSVaG. There you exchanged views with the panelists on the future of pensioner companies. What were the main points/findings?
There have always been pensioner companies and they will continue to be part of corporate development, either as a "natural" consequence or because they are actively pursued. For all parties involved, i.e. the pensioners, the transferring and receiving companies and, ultimately, the sponsoring companies of the PSVaG as a whole, the latter can entail risks and - sometimes - opportunities. There is, therefore, much to be said for defining a somewhat more binding framework, preferably agreed by all concerned. In my experience, such a framework could, but need not, be modelled on occupational pension supervision law. After all, direct commitment is a financing instrument that is deliberately not subject to insurance supervision, even for pensioner companies. In my view, however, it is unacceptable that a risk transfer from a company should lead to unacceptable risks for the beneficiaries or the sponsoring companies of the PSVaG.
4. In other markets, such as the US and the UK, pension risk transfer is an established instrument and the strategic advantages are well documented empirically. Why is pension risk transfer not more widely used in Germany, even by companies that have used it abroad?
You would have to ask the companies concerned. I can only speculate here. But don't compare apples and pears. Abroad, the use of pension funds to finance business activities is much less common, partly because there are usually far fewer tax incentives for doing so than for financing with financial assets. And where there are risks, there are usually opportunities. If, from an entrepreneurial point of view, the internal financing power of pension obligations is estimated to be higher, these are entrepreneurial risks that have been consciously taken. In addition, such spin-offs involve a significant outflow of liquidity. Again, it is up to the company to decide whether the liquidity would be better used elsewhere. In these countries, the so-called risk transfer is usually based on external financing. For both aspects I have just mentioned - internal financing options and liquidity outflow - the starting situation is therefore very different from that in Germany.
5. From your professional experience and from the aba's point of view, what would a best practice model for pensioner companies look like?
The aba will be commenting on this shortly, following intensive preparatory work by a working group. I don't want to anticipate that now. Personally, I believe that the BAG judgement of 11 March 2008 basically points in the right direction, but needs to be revised to a greater or lesser extent, not least because of the changes in the framework conditions since then.