According to separate statements issued on 15 January 2004 by the employers’ association for the metalworking and electrical industry, Gesamtmetall, and by the German Metalworkers’ Union (IG Metall), the industry-wide occupational pension fund for the metalworking and electrical industry - known as MetallRente [1]- is increasingly gaining importance. This is said to be a result, in particular, of the high quality - in terms of cost advantage, rate of return, and security - that MetallRente's pension schemes provide. In contrast to private pension schemes, which have to be paid for entirely out of net wages, occupational pensions have the advantage that the right to 'deferred compensation' refers to net as well as to gross wages. Therefore, the subsidy by the state for occupational pensions can be higher than that for non-occupational private pension schemes and increases the incentives to take out occupational pensions.[1] http://www.metallrente.de/
In January 2004, the social partners in the German metalworking and electrical industry presented positive evaluations of the 'MetallRente' sectoral occupational pension fund that they jointly established in 2001. Some 100,000 employees and 5,500 companies are now involved in the scheme, which has been named Europe's best industry-wide pension fund by a specialist magazine.
According to separate statements issued on 15 January 2004 by the employers’ association for the metalworking and electrical industry, Gesamtmetall, and by the German Metalworkers’ Union (IG Metall), the industry-wide occupational pension fund for the metalworking and electrical industry - known as MetallRente- is increasingly gaining importance. This is said to be a result, in particular, of the high quality - in terms of cost advantage, rate of return, and security - that MetallRente's pension schemes provide. In contrast to private pension schemes, which have to be paid for entirely out of net wages, occupational pensions have the advantage that the right to 'deferred compensation' refers to net as well as to gross wages. Therefore, the subsidy by the state for occupational pensions can be higher than that for non-occupational private pension schemes and increases the incentives to take out occupational pensions.
MetallRente has been the most successful provider of occupational pensions since the 2001 pension reform prepared by the former federal minister of labour, Walter Riester (DE0106227N). This reform introduced a new 'multi-pillar' pension system consisting of public, occupational and private pensions. It therefore strengthened the privately funded aspect of pensions, and replaced the former system that was based almost entirely on public 'pay-as-you-go' pensions.
Such has been the success of the joint fund created in 2001 by Gesamtmetall and IG Metall (DE0111201F) that its membership has extended beyond workers in the metalworking and electrical industry to those in the wood and synthetic materials, textiles and clothing, and steel industries. By the end of 2003, about 100,000 employees had taken out policies and 5,500 companies from various branches had become members of the fund. According to Gesamtmetall, there are 2.5 million potential MetallRente policy-holders within these companies.
The success of MetallRente is also confirmed by the fact that the fund, when compared to similar ones, is regarded as a role model. MetallRente has been named the best industry-wide pension fund in Europe, out of a total of 467 such funds, by the specialist magazine Investment & Pensions Europe (IPE). According to the statement accompanying the IPE award, 'MetallRente is a step towards the future in terms of its modern and effective collaboration between the social partners (employers, unions and employees) on the sometimes divisive question of pensions.' One important reason for the award of the IPE accolade was the 'lean' structure of the joint social partner fund. In the words of one judge: 'The outsourcing concept [implemented] for most of the administration, asset management and support functions of the MetallRente plan reflects modern and efficient structures and contexts.'
According to Martin Kannegiesser, the president of Gesamtmetall, the joint agreement and extension of occupational pensions illustrates a collective bargaining policy that is oriented towards the long term, and does not take only annual pay negotiations into account: 'Both sides gain: employers by an efficient procedure and supply of pensions without a high administrative burden; employees by a competitive price on the policies offered.' Jürgen Peters, the chair of IG Metall, said that MetallRente is 'a role model for a modern and effective collaboration between trade unions and employers'.
Eurofound recommends citing this publication in the following way.
Eurofound (2004), Joint metalworking pensions fund hailed as a success, article.
