Company pension plan – double contribution

Double contribution (BVerfG, decision dated June 27, 2018, 1 BvR 100/15 and 1 BvR 249/15)

By Christine Hansen and Jean-Baptiste Abel

In two decisions, the Federal Constitutional Court ruled that benefits from pension fund commitments that were continued by the employee with his or her own contributions after leaving the employment relationship are not subject to the obligation to pay contributions to the pensioners’ health insurance if the employee has become the policyholder of the continued contract. The Federal Constitutional Court has thus extended to pension fund commitments the legal situation that had existed since the ruling of September 28, 2010 (1 BvR 1660/08) for privately continued direct insurance policies.
The gKV-Spitzenverband has announced in a circular letter that it will accept repayments up to the statute of limitations on a fair basis, and has announced in another letter that it will also apply the BVerfG ruling to pension fund provisions. It remains to be seen how the requirement of being a policyholder, which is alien to the pension fund, is to be dealt with here.
It is still unclear whether there will be a further push to abolish the so-called double contribution system – the contribution of company pensions in individual cases in both the vesting and pension phases – by way of a major solution. In the Federal Government, the Bundestag and the Bundesrat, there have been attempts from various sides (for example, the introduction of an allowance instead of an exemption limit and a return to half the contribution rate), but ultimately the high expected costs are a major hurdle. Since the Federal Constitutional Court expressly has no reservations about the legality of double contribution, the debate is likely to drag on for some time.

Conclusion: The BVerfG has retained the requirement that the employee who has left the company must become an insurance policyholder in order to benefit from the more favorable situation under contribution law. Employers should therefore ensure that they swiftly enable departing employees who wish to continue the provision with their own contributions to enter into the policyholder position in order to avert possible liability for damages. For employers, the double contribution generally has no direct impact. However, the debate and reporting in consumer magazines are increasingly eroding the esteem in which company pensions are held by employees.