Assumption of PSV contributions by the pension fund

Overview

While the German Company Pension Act originally did not provide any special protection for commitments to occupational pension benefits through pension funds in the event of employer insolvency, a 2020 amendment to the law resulted in commitments through certain pension funds being included in insolvency protection via the Pensions-Sicherungs-Verein VVaG (PSVaG). This report addresses the question of whether the pension fund can economically bear the resulting contributions to the PSVaG in place of the employer and what needs to be considered when structuring such an economic takeover.