Retirement benefits scheme at Bosch

How important are retirement benefits schemes for Bosch?

Jargstorff: People should be able to make provisions for their retirement while they are still actively working. This is why Bosch supports its associates with pension provisions that go beyond an employment relationship. With our retirement benefits scheme, we want to make it easier for associates to balance their working and private lives and to give them peace of mind for the future. This includes protecting them against existential risks such as invalidity and death. There is a long tradition of taking care of associates at Bosch: our company founder Robert Bosch launched the first pension plan for associates in 1929. Assuming responsibility and playing an active part in shaping society have always been corporate principles at Bosch.

How is the retirement benefits scheme set up at Bosch in Germany?

Jargstorff: The Bosch pension scheme brings together all the retirement benefits schemes that enable our associates to build up their retirement savings. As an employer, Bosch contributes a fixed percentage of annual income, as well as a sum toward capital formation. Associates can also make their own payments and take advantage of statutory tax and social-security relief schemes. Up to the contribution assessment ceiling, Bosch adds an extra ten percent to these associate payments. All these contributions flow into the Bosch pension scheme. When they retire, associates can claim the capital they have accrued in the Bosch pension scheme as a lump sum, in instalments, as an annuity, or as a combination of any of these three.

What role does the Bosch pension fund play in provision for old age?

Jargstorff: When it was set up in 2002, the Bosch pension fund was the first pension fund in an industrial company in Germany. The pension fund model has special benefits for Bosch associates. In itself, the fund is not driven by profit motive. Its sole aim is to generate reliable company pensions with a high rate of return for associates. The Bosch pension fund allows us to make more attractive investments while keeping the cost for associates low. Yields are passed on to associates one-to-one. Our capital benefit plan means associates can decide for themselves which benefits to take advantage of and how much to contribute themselves. For many years now, we have been regularly praised for our pension fund, as well as receiving awards from specialist and industry circles.

How secure are company pensions at Bosch?

Jargstorff: The sum of all of the contributions paid into the Bosch pension scheme is guaranteed. Moreover, associates’ pension assets are, of course, protected by statutory insolvency protection and supervised by BaFin, the German financial services regulator. Moreover, the Bosch pension fund is an independent institution that is separate from the company. With around three billion euros of fund assets, the Bosch pension fund requires rigid risk management. That is why each associate’s payments are invested speculatively up until the associate’s 55th birthday, after which they are converted into more secure bonds. In order to invest the capital as best we can, we work together with specialist consultants. The fund has always been profitable in the past and generates a yield of around six percent every year.

How can other employees benefit from the Bosch model?

Jargstorff: Future-proof models such as the Bosch pension scheme and, above all, the Bosch pension fund are the key to broad-based retirement benefits in Germany. Our main focus is, of course, on what we as a company can offer our own associates. However, there are many ways in which we contribute our more than 80 years of experience to efforts to improve company pension provision, and thus make a contribution to ensuring financial security for the elderly in Germany. In our contacts with business and politics, we pass on our experience, and in this way help strengthen the statutory framework for company pension provision. In the end, we help improve the level of retirement provision for many employees throughout Germany.