Federal Labour Court, 26.10.2010, Ref.: 3 AZR 711/08
Contracts are often concluded between the department and the staff council (so-called "service agreements") which provide for the company pension to be linked to the remuneration of active employees. This linkage is a result of the legal concept of the German Company Pensions Act, according to which company pensions in Germany are fundamentally remunerative in nature and are to be regarded as part of the remuneration for work performed.
FactsAccording to a service agreement at Berliner Verkehrsbetriebe, the company pensions of former employees were based on the standard of living of active employees. This means that if the working hours of active employees were reduced, not only did their wages fall, but also those of former employees. This was also the case in 2005: working hours were cut from 39 to 36.5 hours and wages and company pensions were reduced accordingly by 6.41 per cent. A pensioner objected to this reduction and took legal action.
BAGThe BAG has now recognised the linking of the company pension to the remuneration of active employees as fundamentally lawful. However, this is only the case "as long as the initial pension to be paid when the pension event occurs remains unaffected". Due to the vesting of the pension, a reduction below this is inadmissible.
Source: Federal Labor Court
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