Defining the Scope, Controlling the Financial Risks

Legal issues to be considered by employers when providing death benefits in company pension schemes

There is a growing pressure on employers in Germany to offer company pensions benefits. Besides old-age and invalidity benefits, a company pension commitment can also provide for benefits paid to survivors in the event of an employee’s death. Although there is leeway for the employer to define scope and terms of death benefits in a company pension scheme, the German Federal Employment Court is continuously developing and defining the limits to a permissible contractual design. The article provides a sense of the legal situation on the basis of selected recent case law.