After a long and controversial
discussion, German parliament
passed the latest Pension Reform on
26 January 2001. On passing to the
Federal Chamber (whose approval is
required for most parts of the
proposed reforms), a number of
objections were raised and the
proposals have been referred to the
mediation committee. Some of the
details can be expected to change in
the course of this stage of the
legislative process, but the overall
structure of the Reform should pass
into law without significant
modification.
The new legislation aims at
ensuring the long term financial
stability of the pension system in
Germany and therefore will bring
about considerable changes to both
the social security and occupational
pensions regimes, including
importantly a significant relaxation of
the current vesting provisions and the
introduction of pension funds. At the
same time a number of tax incentives
are being introduced to stimulate
private savings for retirement.
In next month's edition of The
Multinational, the main article will
examine the likely implications these
moves will have for employers' future
benefit strategies in Germany.
The news contained in the
Newsbriefs section of The
Multinational is drawn from the News and Issues section of the Watson Wyatt website.
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