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PSV 2013 contribution factor

The Cologne-based German Pension Insurance Association (PSVaG), which assumes occupational pension payment obligations for insolvent employers, has set its 2013 premium rate at 1.7 (2012: 3.0 per 1,000). This year, German businesses must therefore pay a significantly lower sum to secure pension insurance for insolvent firms than was the case last year.

The premium rate is based on the contribution assessment ceiling reported by employers by the September 30, 2013 deadline. Essentially, this refers to the secured provisions for pension payouts as recognised on the balance sheets of the member organisations, which total around €311 billion. Overall, member companies will therefore be required to pay around €529 million this year (last year: around €912 million).

While this year saw a higher rate of insolvencies than last year, large scale losses were nonetheless avoided. The result is a significantly lower number of persons with pension benefit entitlements and, in turn, a lower premium rate. The premium rate set for 2013 is therefore also significantly lower than the long-term average premium rate of 3.0 per 1,000.

Around 93,600 companies are members of the Pension Insurance Association.

The legal basis is the German Occupational Pensions Act (Betriebsrentengesetz). On the Act’s terms, the PSVaG is obliged to use a pay-as-you-go procedure to outfinance its payments. Accordingly, annual loss trends are reflected in the corresponding premium rate.