Pension Consulting

According to Section 16 (1) and (2) BetrAVG, the employer must increase current pension benefit payments at least every three years in line with consumer price trends, provided the company's economic situation permits this. The resulting pension increases will amount to up to 20% in 2024.

In recent years, the labour courts have developed a framework that helps companies to assess the economic situation in accordance with the law. We offer our clients a support to analyse the situation by using PwC’s pension adjustment review tool. Subsequently, we can elaborate an economic report to support a legally compliant suspension of the adjustments. Interested? Then get in touch with us.

How high are my company's pension expenses in the market context? Do my employees know how much is invested in their pension benefit plan? Is the pension benefit plan valued and appreciated accordingly?

Benefit plans are often very complex in design and are not adequately communicated to employees. This results in insufficient appreciation of the pension commitment and the (often considerable) expenses.

Our experts analyse the respective pension system for efficiency, transparency, and market conformity. As a result we identify strengths and areas for improvement.

We will be happy to present you with the needs and expectations of employees, compare them with your existing benefit plan and develop your optimal options for future action.

The rise in long-term interest rates in the eurozone can be regarded as a catalyst for a strategic review of the occupational pension model. A significant impact on the valuation of pension obligations has the higher discount rate resulting from the increased yield level of fixed-interest euro securities since the beginning of 2022. Due to the major methodological differences in the accounting principles, the German GAAP interest rate “lags” behind the market valuations.

Considering the above-mentioned facts, the current time is particularly favourable to address the financing and structuring of pension obligations in order to minimise future financial, liquidity, liability and balance sheet risks.

Although the phase of low interest rates in Europe is over, pension obligations are still a burden on companies’ balance sheets. The main reasons for this are the continued low actuarial interest rates used for the valuation of the pension obligations according to German GAAP, the increasing life expectancy of pension beneficiaries and the current high inflation. At the same time, the increased return expectations on the capital market open up a lot of attractive room for diverse actions.

The experts in PwC’s Pension Consulting team will guide you through the entire outsourcing process, for example when transferring pension obligations to a pension fund or spinning off and subsequently selling a retiree company.

Redesigning an existing benefit plan or introducing a new system – in both cases, our aim is to find the ideal system for employers and employees. An attractive and modern design that is also fair and transparent for your employees is the basis for your company to remain – or become – fully competitive with its relevant competitors.

In line with your economic and HR strategy objectives, we work with you and your company's employee representatives to develop the pension system that best suits your organisation. In addition, PwC supports you in implementing the necessary administrative processes. We are also happy to assist in negotiations with internal and external stakeholders, such as insurance companies, the works council, and others.

Managing portfolios, preparing expert opinions and financing occupational benefit plans require a high level of expertise and experience. Consequently, it is important to select a suitable provider. The selection process and tenders are time-consuming and require excellent organisation.

As part of the PwC network, our Pension Consulting team is independent and supports you in all phases of the process exclusively in accordance with your interests.

Our market knowledge enables us to assess potential service providers against clear standards and requirements. We compare your objectives with the offers and present our analysis results in a structured fashion in order to give you a deeper understanding of the complex content. This enables you to make the right decision for your company.