First company agreement on partial retirement in public services

After the conclusion in August 1997 of a company agreement on partial retirement at a state-owned clearing bank in Baden-Württemberg, the Public Services, Transport and Traffic Union (ÖTV) now hopes to reach a nationwide collective agreement on partial retirement in Germany's public services in the forthcoming bargaining round.

On 11 August 1997, the Public Services, Transport and Traffic Union (Gewerkschaft Öffentliche Dienste, Transport und Verkehr, ÖTV) and the regional public employers' association Kommunaler Arbeitgeberverband Baden-Württemberg concluded an agreement on partial retirement (Altersteilzeit) for the state-owned clearing bank Landesgirokasse Baden-Württemberg in Stuttgart. Partial retirement has become an important new issue in 1997 German collective bargaining (DE9708224F) and the new Landesgirokasse deal is the first company agreement on partial retirement in the public sector.

The agreement foresees the introduction of the so-called "block model" which means that older employees from the age of 55 will, over a period of five years, continue to work full-time in the first two and a half years and then stop working in the second two and a half years. During the whole five-year period, the employees will receive a reduced partial retirement income of 85% of their former net full-time income (including extra payments and bonuses). In line with the partial retirement law (Altersteilzeitgesetz) the Landesgirokasse will pay 90% of a full-time employee's contribution to the pension scheme. Finally, the clearing bank agreed to pay partial compensation for the cuts in pension entitlement as a result of partial retirement. The total amount of compensation will depend on the length of service of the individual employee. At the moment, the Landesgirokasse has about 5,000 employees, of whom some 300 are older than 55.

The leader of the regional Baden-WürttembergÖTV, Rudolf Winterholler, sees the recent agreement at the Landesgirokasse as a "breakthrough" for collective bargaining on partial retirement in public services. ÖTV is now demanding the conclusion of a nationwide collective agreement on partial retirement in the forthcoming bargaining round in public services, which will start in October 1997.