The German government has been urged to quickly pass its bill aimed at strengthening occupational pension schemes (BRSG II), but German actuaries are demanding "much more far-reaching reforms".

The German Actuarial Association (DAV) and the Institute of Actuarial Experts for Old-Age Pensions (IVS) support the current draft bill from the Federal Ministry of Labour and Social Affairs, which includes important legal clarifications and practical improvements to occupational pensions.

While the draft remains largely unchanged from the September 2024 version presented by the previous government, IVS and DAV's backing is a strategic decision to avoid further delays in reform - not an endorsement that the bill is sufficient as is.

They emphasise that more “fundamental changes” are still needed to ensure occupational pensions remain sustainable and effective over the long term.

In light of this, DAV and IVS are refraining from proposing further major amendments to enable the bill’s swift passage into law.

Given the ongoing demographic and economic changes, DAV and IVS believe that for pensions to stay reliable in the future, the current public pay-as-you-go statutory pension insurance needs to be supported by a strong, efficient funded component with lifelong benefits.

The actuarial associations previously proposed several changes to the earlier draft. One key suggestion — transferring excess returns to the hedging contribution buffer for pure DC schemes — was partly incorporated into the current bill.

However, other suggestions, such as simplifying taxes for DC schemes and stopping severance payments from going into the public pension system, were not included.

While DAV and IVS agree with the government that occupational pensions need to be stronger and more widespread as a supplement to statutory pension insurance, they believe the planned amendments represent only small steps toward this goal and that more far-reaching reforms are needed to ensure pensions remain sustainable.

From an actuarial perspective, they see room for necessary improvements beyond the current legislative project.

In this context, they referenced their 2022 and 2024 proposals calling for stronger capital market investments, greater flexibility, improved regulatory frameworks, and simplified tax treatment to better support occupational and private pensions.

In particular, they emphasised the importance of going beyond the planned simplifications for current DC pension plans offered by companies.

They also highlighted the need to establish a suitable legal framework that supports modern systems relying on capital market investments in both the savings and benefit phases to achieve a breakthrough.

DAV and IVS further identified a “clear need” to improve the obligation to provide for old age. However, they believe that the current law-making process is not the right time to address this issue, as attempting to do so risks halting progress entirely.

Instead, they will rely on the Pensions Commission set up by the coalition agreement, where they intend to further develop their ideas and bring them into the discussion.

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