Basis of assessment

The LOB pension account

Correct keeping of the LOB pension accounts (also known as shadow account, but referred to below as the pension account) is an important basis for smooth settlement with the Guarantee Fund.

The pension account must give information at all times on the statutory minimum entitlements of the beneficiary. The pension account therefore has nothing to do with regulatory insurance claims as such, unless the benefit scheme only insures precisely the LOB minimum variant. In that case too the pension account only shows LOB pension credit balances.

The pension credit balances are therefore the statutory minimum savings contributions, i.e. 7, 10, 15, 18% of LOB remuneration depending on age. The pension account gives information on the LOB pension credit balance which consists in turn of the accumulated pension credits, the statutory minimum interest rate and any pension credit balances transferred from previous funds. That completes our definitions. It is important not to include pre-compulsory and supplementary contributions in the pension accounts. The insured persons account exists for that purpose and must be kept for every benefit scheme which works with additional benefits.

Vested benefits

For the purpose of settlement with the Guarantee Fund, the value of all vested benefits at the end of an assessment year is required. This figure can be found in the balance sheet or notes to the annual statement of accounts. The regulatory termination benefits are notified to the insured persons each year on the insurance certificate (Art. 24, Vesting Law, FZG).

Sum of pension benefits

The sum of the pension benefits paid out is shown in the operating account. For the calculation of the contribution to the Guarantee Fund, this sum must be multiplied by ten in order to arrive at an approximate pension cash value.