Germany’s social partner model, a new defined contribution type of pension, has lift off as insurance company Talanx AG and trade union Vereinte Dienstleistungsgewerkschaft (Ver.Di) reached an agreement in their negotiations to establish the first social partner model pension in the country.

Publishing a statement on Thursday, 17 October, Talanx said the pension will be provided by Die Deutsche Betriebsrente, a vehicle set up by Talanx and Zurich Group Germany. The agreement with Talanx and Der.Vi is the vehcile’s first company, but fellow creator Zurich Group also intends to sign up.

The agreement between Talanx and Der.Vi is expected to be finalised by 1 January 2020, with approval needed by the Federal Financial Supervisory Authority first. If it is approved, Talanx will offer the pension to around 12,000 employees in Germany.

Talanx board member Fabian von Löbbecke, said: "The social partner model is alive and well – despite all the naysayers.”

"Roughly two years after the act to strengthen company pensions (Betriebsrentenstärkungsgesetz - BRSG) came into effect, we have found an important partner in Ver.Di, with whom we have now established the foundation for making the new retirement provision model available to our employees,” he said, adding that the negotiations are structured and goal orientated.

The social partner model at Talanx is based on an in-house collective agreement that is currently the subject of negotiations between Ver.Di and the group.

Commenting on the agreement, Ver.Di’s Martina Grundler, said: "For employees, the social partner model could be a sensible component of financial security in old age. The fact that Talanx – as the first employer in Germany – now plans to implement this new instrument of retirement provision on a joint basis with us represents an important step especially for employees with low incomes and can could be a pattern for other companies."

Deutscher Pensionsfonds AG CEO Lars Golatka said the agreement is an “important blueprint for the whole industry”.

“In the current debates about the social partner model the decision to introduce a social partner model sends a signal and underlines the importance of new solutions in pension provision.”

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