German pension funds are keen for the new federal government to introduce targeted regulatory relief, with research from WTW revealing that just over a third (38 per cent) would like the government to tighten the proportionality principle for occupational pension schemes.

This was closely followed by the demand for the full implementation of the improvements from the Pension Fund Act II, which was cited as a key task by 29 per cent of participants.

WTW said that the findings showed the industry's desire for a regulatory framework that takes into account the actual circumstances of the pension fund landscape and is designed with practical relevance in mind.

"The survey clearly shows: Pension funds demand more flexibility and less complexity in order to operate stably and efficiently in the long term," said WTW head of retirement Germany, Hanne Borst, said.

The research was undertaken as part of WTW's Pension Fund Day 2025, which saw industry stakeholders discuss the key developments and challenges facing pension funds.

The latest trends from Europe were highlighted as part of this, as were the requirements arising from the implementation of the EU Regulation DORA (Digital Operational Resilience Act), which came into force at the beginning of the year.

"Change has become a constant for pension funds," explained Borst. "This makes a regulatory framework that enables innovation – rather than hampers it – all the more important."

Given this, Borst argued that measures by the German Federal government and Germany’s Federal Financial Supervisory Authority, BaFin, to reduce bureaucracy for pension funds and pension funds would be "important steps" toward ensuring the future viability of pension funds.

Pension fund investments was another key topic at the event, with discussion of the advantages of investing in alternatives such as private equity and what needs to be considered, as the management of alternatives differs significantly from traditional investment products.

The recent turbulence in the capital market was also addressed, as industry experts emphasised that, in order to make portfolios as resilient as possible, diversification in investments is an important key to success.

Broader ongoing work in this area was also highlighted, as WTW noted that the changes to the Investment Ordinance proposed in the 2nd BRSG-E have now been implemented, which included, among other things, a five per cent infrastructure mix quota.

A survey on the relevance of the new investment options revealed that nine of the institutions surveyed stated that they are already in the process of implementing them, while eight do not plan to use them.

According to the survey, three pension funds are in the design phase, and seven others see potential for the medium term, which WTW highlighted as demonstration that while the reforms are beginning to take effect, momentum varies.

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