EntgeltPlus for insurers: The next growth phase of company pensions
New growth opportunities in the company pension market: The untapped employee potential
For decades, the company pension scheme (bAV) has been one of the most important instruments of private retirement provision in Germany. Yet its prevalence continues to fall short of the expectations of many market participants.
According to the German Insurance Association (GDV), there are currently around 21 million company pension entitlements. That corresponds to roughly 52 percent of all employees subject to social security contributions. Despite the employer contribution, the Company Pension Strengthening Act (Betriebsrentenstärkungsgesetz), and numerous political initiatives, this rate has been growing only slowly for years.
Number of active company pension entitlements. Excerpt from the BMAS Old-Age Security Report 2024.
At first glance, the market potential thus appears to be largely exhausted. A closer look, however, reveals a different picture.
The real growth opportunity lies not only with employees who have no company pension. Above all, it lies with the millions of employees who already have a company pension but are building up only comparatively small contributions.
The real problem is often not a lack of interest
When the low prevalence of company pensions is discussed, the focus is often on employers. High complexity, legal uncertainties, or administrative effort are regarded as the main obstacles.
These challenges are real. However, they explain only part of the situation.
In practice, a different picture often emerges: many employees are well aware that additional retirement provision is necessary. At the same time, they often have only limited financial leeway.
Rising living costs, housing costs, energy prices, and everyday expenses mean that a large share of employees live from paycheck to paycheck. Even when the desire for additional retirement provision is there, the disposable income for higher contributions is often lacking.
This is exactly where traditional salary conversion reaches its limits.
Every additional retirement contribution initially means giving up disposable income. For many employees, this step is hard to manage, even when the long-term advantages are known.
This also explains why numerous existing company pension contracts are funded with only comparatively small contributions, and why the resulting pension benefits often fall well short of actual retirement provision needs.
The potential lies in the financing
For insurers, this opens up an interesting perspective.
The crucial question is no longer solely how to win more employers for company pensions.
At least as relevant is the question of how existing employer budgets can be used more efficiently to enable higher retirement contributions for employees.
Many companies already invest considerable resources in compensation, subsidies, benefits, and voluntary additional benefits today. Often, however, these instruments are viewed in isolation or their potential remains untapped.
When a company’s entire compensation budget is considered, new possibilities emerge.
By intelligently combining salary-related benefits, tax-advantaged subsidies, capital-forming benefits, health benefits, and company pensions, significantly higher retirement provision volumes can often be achieved without employees having to accept a comparable reduction in net pay.
This fundamentally changes the conversation.
Instead of talking solely about salary conversion, the focus shifts to how existing employer budgets can be deployed more effectively.
From retirement product to employer concept
In parallel, the expectations of many companies are changing as well.
Studies show that employers are increasingly using several benefit components at the same time. Alongside company pensions, company health insurance, health budgets, non-cash benefits, mobility offerings, and meal subsidies are gaining importance.
HR managers are less and less likely to view these benefits as individual products. Instead, there is a growing desire for holistic employer concepts that combine employee retention, employer attractiveness, and economic efficiency.
In this environment, the role of the company pension is changing as well.
It is no longer perceived solely as a standalone retirement product, but as part of a comprehensive compensation and benefit strategy.
For insurers, this creates new starting points for advisory, sales, and portfolio growth.
Greater potential within existing employer relationships
Focusing on employee potential opens up additional growth opportunities for insurers.
Even in companies with an existing company pension, there are often still considerable reserves:
- employees without existing pension coverage
- low participation rates
- low personal contributions
- unused employer benefits
- a lack of integration with other benefits
The biggest growth opportunity therefore does not necessarily lie in winning ever more new employers.
Often, considerable additional retirement provision volume can be unlocked within existing client relationships alone.
The better employees are given understandable and financially attractive access to retirement provision, the higher participation rates and contribution volumes will be.
Digital processes enable scaling
Alongside the substantive design, efficient implementation is becoming increasingly important.
The more benefits, retirement provision components, and individual advisory situations are brought together, the more complex the workflows become for intermediaries, HR departments, payroll, and insurers.
Many processes are still characterized by manual work. Data is entered multiple times, documents are created in different systems, and information is exchanged via email, Excel files, or PDF documents.
Digital processes create the necessary scalability here.
When advisory, calculation, documentation, communication, and contract conclusion are brought together in one end-to-end workflow, advisory processes can be standardized and made repeatable.
Intermediaries gain more time for advisory work. Employers benefit from less administrative effort. Insurers can use their existing sales and service capacities more efficiently.
Unlocking additional potential together
The company pension will continue to play a central role in the retirement provision of many employees.
At the same time, it is becoming clear that the biggest growth opportunities do not lie solely in winning new employers.
At least as relevant is activating previously untapped employee potential.
EntgeltPlus combines company pensions, company health insurance, salary-related benefits, and other compensation components into one integrated overall concept. The goal is to deploy existing employer budgets more effectively while making the personal benefit visible to employees.
This concept is complemented by digital advisory, documentation, and implementation processes that enable standardized rollout and scaling.
For insurers, this creates the opportunity to build on existing structures and experience, unlock additional retirement provision volumes, and further expand the relevance of their products within modern employer concepts.
While EntgeltPlus provides the framework for advisory, communication, and implementation, insurers can concentrate on their core competencies: high-performing products, sales, client relationships, and the further development of their offering.
This creates partnerships that not only win new employers but, above all, make the enormous retirement provision potential of millions of employees more accessible.
