What is a full form of DAV

DAV: Complete guarantee of contributions in the company pension scheme and no longer possible with Riester

According to the latest studies by the Institute of Actuarial Experts for Pensions eV (IVS), which is also a member of the German Actuarial Association, the "contribution commitment with minimum benefit" (BZML), which is widespread in company pension schemes, has no reforms against the background of the continuing low interest rates the end. "Because from an actuarial interest rate of 0.5 percent or less, the previously mandatory 100 percent premium guarantee can no longer be shown in fact," explains IVS CEO Dr. Friedemann Lucius these sample invoices.

He therefore appeals to the political decision-makers to free the BZML from its corset with the revision of the Riester pension, which has already been publicly discussed. "Otherwise, by 2022 at the latest, numerous direct insurance companies, pension funds and pension funds will be forced to close BZML for new contracts," said Dr. Lucius continues.

After all, BaFin announced at the end of 2020 that it would no longer approve new tariffs for regulated pension funds with actuarial interest rates above 0.25 percent for an unlimited period. "In order to maintain this form of old-age provision that is low-risk for the employer and to be able to make it attractive for the employee, the German Actuarial Association eV (DAV) and its branch association IVS emphatically advocate a new level in the BZML, as in the Riester pension to define the minimum benefit significantly below the previous contribution receipt.

Only then can significant parts of the contribution be invested in higher-yielding real assets such as stocks, real estate or infrastructure projects. “With appropriate management, the investment risks in the company pension scheme, with its mixed collective and decade-long settlement periods, can be easily managed. In view of the current zero and negative interest rates, the partial waiver of expensive guarantees is the only chance of value retention and real gain, ”sums up Dr. Lucius.

Photo: IVS