ChemieVerbandsrahmenvertrag (Chemical Industry s Industrial Agreement)

Transcription

1 The pension scheme of the Chemical Industry based on collective agreement ChemieVerbandsrahmenvertrag (Chemical Industry s Industrial Agreement) We provide for your future - Information brochure for employees -

2 Why is additional old-age provision important? Our life expectancy keeps increasing. This is an encouraging development that, however, presents great challenges to many people who are worried about the financial viability of oldage pensions. The statutory pension alone has long since ceased to be sufficient and its future development cannot be planned. It more or less provides basic coverage. In 2016, the pension paid by the Federation of German Statutory Pension Insurance Institutions (Deutsche Rentenversicherung Bund) amounted to: approx Euro 606 Based on the applicable collective agreement providing for single premium payment and oldage provision, every employee of the chemical industry has a collectively agreed entitlement to defer a basic amount of annually Euro (salary conversion) (former Vermögenswirksame Leistung (capital-forming payment)). The basic amount is exclusively earmarked for an occupational pension scheme funded by deferred compensation (salary conapprox Euro 1,078 For women* For men* Source: Annual report 2016 of the Deutsche Rentenversicherung Bund, pension portfolio table on * (amount payable / West) after deduction of own contributions of pensioners to statutory health insurance and long-term care insurance, old German states Could you actually live on this amount of pension? Or would you like something extra? If you want to enjoy a carefree retirement, any additional financial cushion is important for your old-age provision. Your employer helps you build up an occupational pension with many advantages. Read on and find out how you can achieve a reliable, guaranteed, thus predictable, retirement income. What does the employer offer?

3 version). Additionally, every enrolled employee receives an employer contribution in the amount of Euro annually (so-called Chemie-Tarifförderung I). Since 2010, this offer has been optimized by the collective agreement Lebensarbeitzeit und Demographie (working lifetime and demography). If your employer uses the demography fund exclusively for the negotiated old-age provision in 2017, the full amount of Euro will be paid into your old-age provision. This amount will be increased, where applicable, by the Chemie-Tarifförderung II, which provides for an additional employer contribution of Euro The possible overall employer contribution in 2018 is as follows: Euro (basic amount of deferred compensation Euro (Chemie-Tarifförderung I) Euro (demography amount ) Euro (Chemie-Tarifförderung II) Euro 1, paid by your employer without a personal contribution of the employee being required No one should waive this employer contribution. Who is behind the Chemical Industry s Industrial Agreement? In 1999, the parties to the collective agreement of the chemical industry the National Chemical Employers Association (Bundesarbeitgeberverband Chemie e.v. (BAVC)) and the Mining, Chemistry and Energy Workers Union (Industriegewerkschaft Bergbau, Chemie, Energie (IG BCE)) agreed on the Chemical Industry s Industrial Agreement. In order to provide guaran-

4 teed and reliable old-age provision, the parties to the collective agreement selected a highperformance consortium of life insurers. The management of this consortium was assigned to Allianz Lebensversicherungs-AG. The following Life Insurance Companies are members of the consortium: Allianz Lebensversicherungs-AG Debeka Lebensversicherungsverein a.g. Ergo Lebensversicherung AG Generali Lebensversicherung AG Gothaer Lebensversicherung AG R+V Lebensversicherung AG Württembergische Lebensversicherung AG What else can you as employee do? In addition to the employer`s offer, you can invest an individual premium into your old-age provision. You determine what amount of savings premium you want to invest. For every Euro 100 you pay voluntarily into the occupational pension scheme, your employer supports you with a contribution of Euro 13 (based on Chemie-Tarifförderung II). Your premium can be funded by additional vacation pay, your annual bonus or parts of your monthly salary (depending on the internal company agreement). Please refer to page 10 for an example. In 2018, the total premium supported by the employer 1 amounts to 4% of the contribution assessment ceiling stipulated for West German statutory pension insurance (hereinafter CAC). In 2018, a total amount of Euro maximum 3,120 applies. Note: Since 2018, the government subsidizes premiums invested in an occupational pension scheme up to 8% of the contribution assessment ceiling stipulated for German statutory pension insurance in West Germany (CAC). If you are interested in investing premiums ranging from Euro 3,121 to maximum Euro 6,240, please contact your employer. Please note that these higher premiums (between Euro 3,121 and currently Euro 6,240) do not benefit from Chemie-Tarifförderung II. 1 The employer contributions must be taken into account when calculating the maximum premium permitted.

5 How can you start? In order to start building up your old-age pension scheme, you simply have to contact your Human Resources Department (HR). You can obtain specific information in advance (e.g. the pension amount or lump sum payment) by using our special online pension calculator. Let's start by clicking: 1 In the menu Für Arbeitnehmer (1) you can find further information about your old-age pension scheme and a link to the pension calculator (2). 2 Click on (3) and start the Online calculation : 3

6 Select one of the two Chemie-Tarife (premium rates for the chemical industry) (4). 4 In the following boxes you just need to fill in your first name, last name, date of birth, the commencement date of insurance coverage and the premium you wish to invest. Start the calculation and after a short time you will receive a non-binding, however, very detailed proposal. The proposal can be viewed online or downloaded (PDF) for storage or printing. Note: The proposal also serves as application that can be submitted to HR. What happens next? You and your employer will conclude an agreement on salary conversion, and you will be enrolled in the Chemical Industry s Industrial Agreement. As confirmation you will receive a certificate and an insurance promise. As of the agreed commencement date, premiums will be invested in your old-age provision. Your employer automatically calculates the tax and social security savings and pays the Chemie-Tarifförderung. You will receive an annual benefit report for your old-age pension scheme automatically free of charge (via your employer). Upon completion of age 65, you will receive a letter indicating the benefits and an order for payment of your pension or optional lump sum payment.

7 What happens if you leave your company before retirement? If you leave service early - before commencement of pension payout the employer will inform us about your leaving service. You can then continue the pension scheme either by paying own premiums or as paid-up insurance policy. Generally, it is also possible to transfer your previous occupational pension scheme to a new employer. As soon as we receive notification from your employer, you will automatically receive a letter informing you of all important details. The letter will be sent to your private address and you can take your time making a decision. The premium rates available to the chemical industry ( Chemie-Tarife ) The two Chemie-Tarife provide the possibility to build up old-age provision in an optimal way: 1. Chemie-Tarif I (For unmarried exclusively, for married optionally) Lifelong full pension as of age 65 or Early (reduced) retirement pension (earliest from age 60, if the pension promise is written before 2012; earliest from age 62, if written as of ) Single lump sum payment (100 %) instead of lifelong pension Premium refund in case of death before commencement of pension payout Pension to the survivors in case of death after commencement of pension payout amounting to 5 times the annual guaranteed pension (attained at commencement of pension payout) minus already paid pensions 2. Chemie-Tarif II (Optional for married) Lifelong pension as of age 65 Early retirement pension (earliest from age 60, if the pension promise is written before 2012; earliest from age 62, if written as of )

8 Single lump sum payment (100 %) instead of lifelong pension Premium refund in case of death before commencement of pension payout Survivor s provision in the form of widow s/widower s pension in the event of death of the person insured In case of a change in family status, premium rates can be switched. Within 12 months of marriage or divorce, you can change from one premium rate to the other. Note: Married employees can choose between Chemie-Tarif I and II, while unmarried employees are always grouped into Chemie-Tarif I. Your advantages The parties to the collective agreement have opted for old-age provision implemented through Direct Insurance. Already in 1999, a group insurance contract for the chemical sector was concluded in cooperation with the currently seven high-performing life insurers (under the leadership of Allianz Lebensversicherungs-AG). Since then, all employees can benefit from the following advantages: Favorable terms for key accounts Full old-age pension as of age 65 Upon request, the retirement date can be shifted individually, e.g. upon employment beyond the retirement date or early retirement Very good value for money No sales costs (no acquisition costs and commissions) No medical examination upon conclusion of Chemie-Tarif I 100% lump sum payment instead of lifelong pension Full pension or lump sum payment at age 65 Easy handling, i.e. enrollment and premium payment directly via your employer Guaranteed interest rate and guaranteed benefit upon commencement of old-age pension payout (=plannable old-age provision), thus no investment risk Private continuation upon leaving the company Uncomplicated transfer to the new employer

9 Premiums up to 4% of the respective CAC are free of tax and social security contributions (2018 = Euro 3,120) Benefits do not constitute assets under Hartz IV legislation, that means no offsetting against unemployment benefit II in case of unemployment all entitlements are maintained Personal contact for your questions concerning the contract is available at: / , Visit our detailed website at www. chemie-verbandsrahmenvertrag.de including a list of FAQs and our freely accessible proposal calculator. The easy way to turn 54 Euros into 113 Euros For every 100 Euro you save, your employer will contribute 13 Euro. This is how it works (an example*): Your desired saving premium (= employee premium) 100 Euro* Minus tax and social security contribution savings: Your saving premium is directly taken from your gross income and is therefore tax-free. The second advantage is that no social security contributions arise 46 Euro* = monthly net waiver of salary: 54 Euro The above saving premium of 100 Euro monthly invested in the occupational pension scheme only costs 54 Euro* in our example. Additionally: The Chemie-Tarifförderung II increases the saving premium of 100 Euro by You receive this employer contribution on top. 13 Euro In total, 113 Euro is paid monthly into your own, secure and guaranteed occupational pension scheme. However, your net salary is only reduced by 54 Euro monthly. * Explanation: 100 Euro employee premium / deferred compensation monthly. Full-time employee, 40 years old, tax class I, gross income Euro 2,300 monthly, subject to church tax, social security contribution, statutory health insurance, tax table 2018

10 What benefits will the employee receive at age 65? Insurance data Commencement of insurance Commencement of annuity payout Age at the end of the deferred period/premium paying term 65 years Employee s age 40 years Premium paying term until age years and 9 months Total annual premium (based on monthly Euro 113) Euro ) Chemie-Tarif I: Benefits (after costs) Total benefit Including participation in profits Lifelong monthly pension Total pension EUR (1 st year of pension payout) or Lump sum payment Total lump sum payment EUR 45, The indicated total lump sum includes a terminal dividend of EUR 2, and participation in valuation reserves generated by the lead insurer amounting to EUR These two values have also been taken into account upon calculating the total pension. Terminal dividends and participation in valuation reserves generated by the consortium may differ. The amount of participation in profits (participation in profits and valuation reserves), thus the indicated total benefits, cannot be guaranteed. 2) Chemie-Tarif II Benefits (after costs) Total benefit Including participation in profits Lifelong monthly pension Total pension EUR (1 st year of pension payout) or Lump sum payment Total lump sum payment EUR 44, The indicated total lump sum includes a terminal dividend of EUR 2, and participation in valuation reserves generated by the lead insurer amounting to EUR These two values have also been taken into account upon calculating the total pension. Terminal dividends and participation in valuation reserves generated by the consortium may differ. The amount of participation in profits (participation in profits and valuation reserves), thus the indicated total benefits, cannot be guaranteed.

11 Start planning for tomorrow today. Enroll now and enjoy a secure and carefree retirement later. Every year counts! Further information can be obtained from your employer, your works council, the homepage the National Chemical Employers Association (Bundesarbeitgeberverband Chemie e.v. (BAVC)) and the Mining, Chemistry and Energy Workers Union (Industriegewerkschaft Bergbau, Chemie, Energie (IG BCE)). Published by: (Version 04/2018)