Here’s a useful ‘heads-up’ from our Germany Country Manager – Rudy Blaich on possible developments in the German pension market that may affect our international corporate clients who have staff based in Germany.
Germany might be on the way to copying some parts of the UK’s Automatic Enrolment, albeit slightly.
On November 4th, last draft legislation was brought before the German Parliament – the Bundestag to address the issue of employees who face a lower income after their retirement and the financial uncertainty that they face as a result.
The outcome is that “Automatic Enrolment” will be allowed, starting with blue chip companies. This system, with “Opting Out”, might slowly drop down to smaller companies. Employers will be forced to support (subsidise) employees’ pension contribution by up to 15% of the contribution amount.
At the same time Employers will get a net labour cost reduction of more than 19.5%.
So why not act now? It is only a question of understanding, because there are already solutions available that will help especially low income employees to get a small extra pension built up without extra costs for employers. We can help!
Employers who will follow the invoking call (to support those employees with less than €24,000 annual income) will be subsidised by the state.