The German public sector supplementary pension scheme (WEST

VBL.
The German public sector supplementary pension scheme (WEST).
Delicia Hofmann
Bochum 15 October 2014
The German public sector occupational pension scheme - West
Seite 1
VBL // Introduction
VBL
What do they
want from me?
The German public sector occupational pension scheme - West
Seite 2
VBL // Content
■ VBL // Definition
■ VBL // Landscape
■ VBL // Figures
■ VBL // Relationship
■ VBL // Products
■ VBL // Solution and Choice
■ VBL // Benefits
■ VBL // Options
Seite 3
VBL // Definition
Supplementary
pension
In some countries part of statutory
pensions
In addition to state pensions for residents or
basic state pensions
Earnings related
Compulsary
The German public sector occupational pension scheme - West
Occupational Pension
 Company pension
 Pension Funds
 Multi-employer / sector specific
 Group insurance
Trusts
Mostly non-compulsary by law but often
mandatory on basis of collective
agreements
Seite 4
VBL // Content
■ VBL // Definitions
■ VBL // Landscape
■ VBL // Figures
■ VBL // Relationship
■ VBL // Products
■ VBL // Solution
■ VBL // Choice
■ VBL // Benefits
■ VBL // Options
Seite 5
VBL // Pension landscape Germany
First pillar:
Statutory
pension
scheme
DRV
Second pillar:
Occupational
pensions
Third pillar:
Private
provisions
VBL pension
scheme
3-pillar-system
The German public sector occupational pension scheme - West
Seite 6
VBL // Content
■ VBL // Definitions
■ VBL // Landscape
■ VBL // Figures
■ VBL // Relationship
■ VBL // Products
■ VBL // Solution and Choice
■ VBL // Benefits
■ VBL // Options
Seite 7
VBL // Official figures (Status 31.12.2013)
28.500.000.000 Euro
Assets under management
5.534.933.000 Euro
Contributions and premiums paid into VBLKlassik
392.478.000 Euro
Monthly pension payments
197.705.000 Euro
Contributions paid into VBLextra und VBLdynamik
4.405.147
Insured members in VBLklassik (active and deferred)
1.230.401
Pensioners
327.072
Contracts - VBLextra and VBLdynamik
5.400
Affiliated employees
987
VBL Staff members
The German public sector occupational pension scheme - West
Seite 8
VBL // Content
■ VBL // Definitions
■ VBL // Landscape
■ VBL // Figures
■ VBL // Relationship
■ VBL // Products
■ VBL // Solution and Choice
■ VBL // Benefits
■ VBL // Options
Seite 9
VBL // Legal relationship
VBL
Pension provision
researcher
Affiliation / Statutes –
registration of all
employees
employer
Collective
agreement
Social
insurance
Legal obligation to register
employees
Seite 10
VBL // Content
■ VBL // Definitions
■ VBL // Landscape
■ VBL // Figures
■ VBL // Relationship
■ VBL // Products
■ VBL // Solution and Choice
■ VBL // Benefits
■ VBL // Options
Seite 11
VBL // Pension products
Occupational pension provision
Compulsory insurance
Voluntary insurance
Mandatory for all workers of affiliated employers
Additional to compulsory insurance (premiums
regularly paid by employees)
VBLklassik:
 Mainly pay-as-you-go
 Qualifying period:
60 months
VBLextra or VBLdynamik:
Funded
No qualifying period
For insured employees in the public sector only
Seite 12
VBL // Content
■ VBL // Definitions
■ VBL // Landscape
■ VBL // Figures
■ VBL // Relationship
■ VBL // Products
■ VBL // Solution and Choice
■ VBL // Benefits
■ VBL // Options
Seite 13
VBL // Our solution for researchers
The prerequisites are:
■
Temporary employment as a researcher, contract for less than
5 years.
■
No previous service periods with VBLklassik or similar scheme
within Germany .
■
Submission of application to employer within 2 months after
jobstart.
■
Important:
Extension / Continuation of working contract with the same
employer for more than 5 years
subsequent registration in
VBLklassik.
■
VBLextra months of insurance recognised in fulfilling VBLklassik
qualifying period in the abovementioned case.
■
Same employer AND no interruption – not even a single day
Seite 14
VBL
// Your choice: VBLklassik or VBLextra?
VBLextra instead of VBLklassik
VBLklassik
 Financed
VBLextra
by employer
and employee – 6,45%
EMPLOYER share and
1,41% EMPLOYEE share
 Qualifying period: 60
months
 Defined benefit scheme
 Pension point system
 Social components
 No transferability
 Premiums
paid by
EMPLOYER (WEST)
only: 4% of pensionable
salary
 No qualifying period
 Pension rights accrued
from first payment
 Capital funded scheme
 Pension point system
 No social components
 Transferability under
certain requirements
No possibility to opt out of the
VBL insurance completely !
Seite 15
VBL // Content
■ VBL // Definitions
■ VBL // Landscape
■ VBL // Figures
■ VBL // Relationship
■ VBL // Products
■ VBL // Solution and Choice
■ VBL // Benefits
■ VBL // Options
Seite 16
VBL // Benefits
Similar benefits for both VBLextra and VBLklassik
 Old-age-pension – Retirement age in Germany 67 years
 Incapacity pension – Unable to work due to illness or injury
 Survivors’ pension (spouse, registered partner, orphans) –
orphaned children up till the age of 25, if they are still students
 Benefits paid out on application only
Seite 17
VBL // The benefit system
Pension calculation for VBLklassik :
1/12 of the annual
Pensionable salary
:
Reference salary
(€ 1000)
x Age factor
=
Pension points
=
Monthly pension
Pension points determine your pension amount
Pension points +
Possible bonus
points
x
Point value
(€ 4)
Seite 18
VBL // The benefit system
Pension calculation for VBLextra:
Total annual
Contributions
:
Ref. contribution
(€ 1200)
x Age factor
=
Pension points
=
Monthly pension
Pension points determine your pension amount
Pension points +
Possible bonus
points
x
Point value
(€ 4)
Seite 19
VBL // Content
■ VBL // Definitions
■ VBL // Landscape
■ VBL // Figures
■ VBL // Relationship
■ VBL // Products
■ VBL // Solution and Choice
■ VBL // Benefits
■ VBL // Options
Seite 20
VBL // Further options
When leaving your employer and/or leaving Germany:
■
VBLextra - insurance membership is deferred
■
Pension entitlements retained
■
Continuation of contract is possible, payment of own
contributions
■
Application for continuation within 3 months after your
contract ended
■
Transfer of capital to your new pension provider might be
possible in certain constellations (mainly with GB, Austria)
■
Also refer to the FindyourPension website under VBL (as
search criteria), temporary employment and question NR.8
What happens if my contract is complete and I begin working
elsewhere?
Seite 21
VBL // Further options
When leaving your employer and/or leaving Germany:
■
VBLklassik
■
Qualifying period not reached - Refund of contributions
(on application) till the age of 69 years
■
Qualifying period reached – No refund possible
■
Entitlement stays with the VBL and pension paid out on
application
■
Current pension age in Germany 67 years
■
No transfers from this scheme – EXCEPTION: New
employer is an EU Institution
■
Keep us informed of changes in address – this you can do
online on www.vbl.de under Meine VBL
Seite 22
VBL // Further options
Transfers
■
VBLextra is capital-funded and in general transferable
■
BUT neither German nor European law regulates crossborder transfers thus far
■
Transfers possible to and from Great Britain
■
Each application has to be handled individually – WHY?
■
Not every transfer is sensible BECAUSE
The new scheme’s benefits might be less than those of the
former one
The likelihood of returning to the initial country
We will gladly advise you on this matter!
Seite 23
VBL // Further options
When changing jobs within Germany as a researcher
(public sector):
■
Renewed decision between VBLklassik and VBLextra if
employer insures with the VBL and all prerequisites are
fulfilled
New contract = New decision!
But only if NO previous VBLklassik
insurance times exists!!!
■
If the new employer (e.g. clinic) is affiliated to another public
sector pension fund, recognition of VBLklassik insurance
times and vice versa takes place.
Seite 24
VBL // Further options
Increase your pension amount by
■
Taking out extra cover (VBLextra or VBLdynamik)
■
Pay your own voluntary contributions
Seite 25
Thank you.
Seite 26