With the further strengthening of company pensions, Germany's cabinet has initiated the reform of the second pillar of the retirement provision system. Small businesses will find it easier to offer company pensions, and it will be less likely for low-income earners to quickly lose access to the state system.

There are additional ways to help expand company pensions to beyond the 50 percent mark, such as voluntary opt-out regulations at the company level, which the insurance industry would welcome.

The most interesting details are hidden in the fine print. For pension funds and small insurance companies, national regulations on capital investment are being made more flexible. Larger insurers, however, remain subject to different supervisory requirements, such as those under Solvency II. The loosening of investment regulations and coverage requirements will allow for more profitable investments and a longer-term perspective on volatile portfolios. This is helpful.

The amendment of regulatory requirements is part of the WIN initiative aimed, at strengthening growth and innovation. The agreement was recently signed by the government and various financial market players from the private sector. Approximately 12 billion euros of additional private capital is expected to flow into start-ups, a sector not yet heavily targeted by smaller investment funds. The government is delivering on this by putting in place the necessary framework conditions with this draft law.

But a crucial aspect remains unresolved for comprehensive pension reform: the modernisation of the Riester pension and private retirement savings. The draft bill is expected to be released to the public soon. It will then become clear whether the ideas of the private pension focus group have been incorporated, or if state interventionism will prevail.