Through an online portal, German citizens will be able to access information on their pension entitlements digitally, potentially allowing them to identify actions they may wish to take as part of planning for their retirement.

The new law regulates the development and introduction of a digital pensions dashboard. This includes the establishment of the “Central Office for the Digital Pensions Dashboard” (Zentrale Stelle für die digitale Rentenübersicht, or ZfDR) and the steps leading up to the introduction of the dashboard, from the development phase, through testing to the formal launch and ongoing operation.

The development phase will take 21 months, starting in January 2021. The digital pensions dashboard will then enter a 12-month testing phase, working with pension institutions on a voluntary basis to test its functionality. Only at a later stage, once the dashboard has been formally launched (date to be determined in subsequent regulations), will certain pension institutions be required to participate. Participation will be mandatory for all pension institutions that are currently required to provide annual pension statements. Other pension arrangements can participate on a voluntary basis.

Central Office for the Digital Pensions Dashboard

The ZfDR will be set up within the Deutsche Rentenversicherung Bund (DRV Bund), which manages the German State Pension System, reflecting the DRV Bund’s expertise, reputation, and experience in handling large amounts of data and their existing interfaces with many pension providers. The role of the ZfDR is to define the data that pension institutions will be required to provide, processing the data, and presenting it to users, and to create the IT infrastructure for the digital pensions dashboard.

The DRV Bund and the ZfDR will determine the content of the dashboard together with a steering committee. The steering committee will be a small group, able to make decisions in a timely way, and will have representatives from consumer protection, the Federal Ministry of Labour and Social Affairs (BMAS), the Federal Ministry of Finance (BMF), and the pension institutions.

Online portal

The ZfDR will provide a central online portal, where users can access information on their pension entitlements. The online portal will be available to all German citizens, the data will be made available digitally only, and only the individual user will be able to access and download information on their own benefits. Third parties will not have access to the data.

The aim is to present the information in a comprehensible, comparable, and accessible manner. Pension institutions will be responsible for providing details of their members’ pension entitlements to the ZfDR.

Dashboard content

The task of the ZfDR is to consolidate the pension statements for all of an individual users’ different pension entitlements in a single location. The records will include the type of plan, the amount of the accrued benefits as well as the potential pension benefits. General information will also be provided on tax and social security implications of the plan types and on possible disability benefits (although not the amounts).

The ZfDR collects the information and consolidates it, clearly illustrating the accrued pension benefits, the potential benefits, those that are guaranteed and those projected. This will allow the individual user to see the benefits they have already earned and what they could potentially achieve. This pension overview is at the heart of the digital pensions dashboard. A steering committee will determine how the information will be displayed, potentially totalling individuals’ entitlements from different plans or using charts to illustrate the benefits.

Data collection and access

The ZfDR and the pension institutions will use individuals’ tax IDs to identify users for the online portal. This will mean that tax IDs will need to be added to the pension institutions’ member records.

Individual users of the online portal will authenticate themselves with the ZfDR with their tax ID. Using that ID, the ZfDR calls up the pension entitlement data from the various pension institutions and the DRV Bund. The data is then merged into the dashboard. It is expected that collecting the data from the various parties will take several days, and real-time data transmission will not be possible initially. Once data has been collected for an individual user, a user account with that data is maintained by the DRV Bund. It will also be possible to retrieve the information in downloadable file formats. Currently there are no plans to include dependant’s pension benefits in the dashboard.

Pension institutions that are already required to issue annual pension statements will be required to provide data to the digital pensions dashboard. Book reserve plans (Direktzusagen) and Support Funds (Unterstützungskassen) are not required to submit data, but may participate voluntarily in the digital pensions dashboard if the pension entitlements they provide meet the criteria for inclusion. It is hoped that employers who provide other types of pension funds (Direktversicherung, Pensionskasse or Pensionsfonds), for which data is required to be submitted, will choose to submit data for their book reserve plans and Support Funds voluntarily. Where the connection of a pension fund to the online portal is voluntary, it would be possible for that fund to report only certain entitlements.

The long-term objective of the Bundesministerium für Arbeit und Soziales (BMAS) is to extend the online portal to include all types of pension fund.

Employer considerations

Once implemented, the digital pensions dashboard could become an important step in helping employees better understand their benefits and plan for their retirement. Employers will wish to monitor the introduction of this system and in due course consider whether to participate for their pension plans.