The government has finally released its long-awaited pension reform proposals under the draft Second Act to Strengthen Occupational Pensions (Zweites Betriebsrentenstärkungsgesetz). The main goal of the reforms is to extend coverage of occupational pension plans to the roughly half of the workforce that currently does not participate in such plans (Federal Ministry of Labor and Social Affairs data). The proposals also aim to make company pensions more flexible. Read WTW Germany’s detailed analysis of the act in our press release: Referentenentwurf des Gesetzes zur Änderung des BetrAVG veröffentlicht.
Among other things, the draft act would:
The draft act is also notable for the topics that are absent, such as measures to promote conventional company retirement plans. Employers should monitor the legislative process and prepare to review their occupational pension and deferred compensation policies. The draft act, possibly reflecting comments from parties consulted by the responsible ministries in July 2024, is scheduled to be adopted by the cabinet by the end of August 2024 and then submitted to Parliament for passage.