Demand to the Federal Government: Pension funds push for less regulation

The pension fund industry is demanding regulatory relief from the new federal government. A survey of 60 participants at the WTW Pension Fund Day shows that 38 percent of respondents see tightening the proportionality principle as the most urgent task. 29 percent demand the full implementation of the improvements from the second Company Pension Strengthening Act (BRSG II), which, among other things, relaxes investment regulations for pension funds and creates new investment opportunities.

"Pension funds need more flexibility and less complexity," says Hanne Borst, Head of Pensions Germany at WTW. The industry wants a regulatory framework that allows for innovation. The principle of proportionality is intended to ensure that smaller pension funds are not burdened with the same regulatory requirements as larger institutions.

New investment options show first effects

The five percent infrastructure mix quota contained in the Pension Funds Act II has met with mixed reactions: Nine institutions are already implementing the new investment options, while eight do not plan to use them. Another ten pension funds are considering or planning to use them in the medium term. For the first time, the law allows pension funds to invest up to five percent of their assets in infrastructure projects—an expansion of the previously regulated investment universe.

The Digital Operational Resilience Act (DORA), which came into force in January, is increasing the pressure on pension funds to adapt. The EU regulation requires pension funds to implement comprehensive measures to ensure digital operational stability and IT security. Investment strategy remains a priority, with diversification through alternative investments such as real estate, private market investments, and private credit funds coming into focus.