29. November 2020

Current market situation

The market area of occupational pension provision and related working time accounts is mainly occupied by financial services and insurance companies and pushed to the fore. Unfortunately, this is not always to the advantage of the consultants and clients concerned.

Against this background and the increasing complexity and topicality of consulting processes in the areas of occupational pension provision and working time accounts, a sensitisation and clarification as well as a rethinking process for the consultant and client landscape is urgently required.

Advice in the area of company pension schemes and working time accounts largely takes place in classical civil law. Thus Tangierungen are indispensable for example with the tax, social security, work and the balance law and consequently classical consulting fields for legal advisors. However, for more than three decades, the insurance industry has been conveying the impression that occupational pension provision is exclusively a product issue and that the associated legal advice is a classic ancillary business. Also the relevant company pension scheme consulting organizations and professional associations clarify only absolutely insufficiently the mandator and clientele groups and follow thus the argumentation of the insurance industry .

However, the current jurisdiction should make the above-mentioned “circles” pay attention:

The Federal Supreme Court has definitely made it clear that legal advice in the field of occupational pensions may only be provided by licensed legal advisors. Otherwise there is a risk of liability consequences (see BGH (Federal Supreme Court) ruling of 20.03.2008 – IX ZR 238/06; DB of 02.05.2008, p. 983 – 985). This makes it clear to the consultant or employer involved that occupational pension provision is to be regarded as a “consulting area” and not as a “product sales vehicle”.

The above-mentioned trends can also currently be observed for the innovative field of working time accounts:

Due to the fact that the “time value accounts” business segment is still in its initial phase, due to the still young legislative history, countless insurance and investment companies are attempting to capture the market for time value accounts. As in the area of company pension schemes, product designs are offered to the broad market exclusively instead of focusing on the urgently needed advisory, service and service factors.

In addition, the aspect of labour law jurisdiction in connection with working time accounts must not go unmentioned. Even if the accumulation of credit balances does not represent a way of implementing the company pension scheme, the developing case law within the framework of the accumulation of credit balances can also be expected to be very restrictive for the advisory guild.

The topic described should also give explicit thought to company managers:

Company managers often make use of vicarious agents, for example tax and financial consultants, to carry out the implementation processes in the areas of company pension schemes and working time accounts. This is often done in the belief that liability can be “shifted” as a result. However, a vicarious agent can never get a company manager out of the “line of fire”, even if the vicarious agent has caused a liability-relevant situation for the employer or the company manager.

An exemplary view into the Ltd law relevant for many enterprises is sufficient for clarifying:

  • “The managing directors must apply the care of a prudent businessman in the affairs of the society. (§ 43 paragraph 1 Ltd law)
  • “Directors who violate their duties shall be jointly and severally liable to the Company for any damages incurred.” (§ 43 paragraph 2 GmbH (Ltd) law)
  • “The liability of the managing director in the case of delegation of duties presupposes that the managing director has culpably violated monitoring, organisational and selection obligations.“ (Comments on the GmbH Act, Baumbach/Hueck)

Thus, the company manager can only hold his “vicarious agents” accountable in the internal relationship, but in the external relationship he alone has to hold his “head to the line”, because the
violation of the selection obligations can often be blamed on a company manager. It is therefore also important for company managers to have a firm knowledge of the facts and to select the right consultant so that they do not have to face the problem of “what I actually signed there”.

The effects of these developments and circumstances are also impressively demonstrated in the occupational pension and working time account market by means of the inadequate penetration rates of the respective supply and security routes.

The “Kenston Academy for Occupational Pensions and Working Time Accounts” is clearly countering this aberration with your help in order to lead the market for occupational pension schemes and working time accounts to where it is “at home” successfully implemented:

in the field of services and legal advice.