Poverty in old age inevitable? Every third pension fund is in financial difficulties — RT DE

8 Feb 2022 10:25 am

The company pension scheme is an important security for many employees. However, the persistent phase of low interest rates and inflation are making it increasingly difficult for pension funds to generate returns. Every third pension fund is already under the stricter supervision of BaFin.

About a third of all German pension funds are on the brink of collapse, according to the Handelsblatt on Monday reported. This is primarily due to the phase of low interest rates prompted by the ECB and persistently high inflation. The purpose of the pension fund is to guarantee coverage for lost income due to old age, disability and death. Every eighth German citizen has taken out his or her occupational pension scheme through a pension fund of the respective employer. About 8.5 million save as so-called contenders a contract of the 135 pension schemes. About 1.4 million receive payouts as retirees.

Around 40 pension funds are currently under the intensified supervision of the Federal Financial Supervisory Authority (BaFin). Last year it was 36. Most pension funds promised their customers benefits with interest of three percent or more per year at the beginning of the contract, which have not been feasible for some time.

With the Deutsche Steuerberater-Versicherung, the pension fund for the tax consulting professions, another pension fund has been in liquidation since January, as reported by Wirtschaftswoche at the end of last month communicated.

BaFin had already withdrawn her business license at the beginning of 2020. At the end of 2020, the Caritas pension fund and the Cologne pension fund were finally wound up. Both were revoked their license to operate the insurance business.

The industry is now hoping for an end to the low interest rate policy – but in contrast to the US central bank FED, the ECB, under the leadership of Christine Lagarde, is still sticking with the status quo of cheap money and continues to flood the financial markets with it.

More on the subject – Ampel plans one-time help for heating costs – but only for a small part of the poor

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