Changes in Pensions for in-house lawyers in Germany – an overview
In April 2014 the German Federal Social Court (Bundessozialgericht; BSG) ruled that in-house lawyers can no longer be exempted from compulsory membership of the German Federal Pension Fund (Deutsche Rentenversicherung). When moving into a new role, in-house lawyers will therefore not remain in the professional pension fund for members of the legal profession (Versorgungswerk). The same applies to lawyers in private practice upon a move in-house. With regard to personal pension provision this represents a significant financial setback.
At the same time the court ruling has an extensive impact on recruiting – companies looking to hire lawyers are seeing fewer applications as many lawyers are wary of a move for financial reasons. If companies want to win over the highly qualified lawyers for their legal department, they now more than ever must be attractive employers – either through financial compensation with regard to salary, a competitive company pension scheme or particular career development opportunities.
Due to its significance the German Government has swiftly addressed this topic. The Federal Ministry of Justice is currently campaigning for a solution which shall allow in-house lawyers to remain members of the professional pension fund for members of the legal profession. The outcome remains open.
In the following please find an overview of the different and in parts also common approaches to the current discussion (in German only):
To discuss this issue in more detail please contact Justin von Deutsch at [email protected]