Topic Occupational retirement provision The occupational retirement provision system in Germany
Institutions for Occupational Retirement Provision (IORPs)
Occupational retirement provision (ORP) is the promise of retirement and disability benefits or benefits for surviving dependants made by an employer to its employees. As the Second Pillar of retirement provision, the ORP represents, together with personal pension schemes as the Third Pillar, a supplement to statutory pension insurance (the First Pillar of retirement provision).
The ORP’s main legal basis is the Occupational Pensions Act (Betriebsrentengesetz – BetrAVG). The Act governs commitment types, forms of financing and the vehicles for implementing the ORP. Various supervisory arrangements also apply in part for different methods of implementation. Employee claims arising from the ORP are protected by multi-level guarantee schemes, depending on the employers’ commitment and the method of implementation.