VZWL Information Days

The VZWL (Pension Scheme of the Westphalia-Lippe Dental Association) will be holding two public information days again this year where VZWL staff will be available for advice and answering any of your questions.

These information days will take place on Saturday, 24 August 2024 and Saturday, 23 November 2024, from 9:00 to 16:00. They are open to all dentists and provide an opportunity to talk to our staff about the VZWL's pension services and options.

Please note that you can also contact us all year round during our office hours to arrange an appointment with one of our advisers.

Our advisers:

Jörg Dohmen                      0251 507-411

Frank Zeiler                        0251 507-414

 

We look forward to hearing from you!

 

Dear Colleagues,

 

We are very aware that the Covid pandemic is affecting everyone and of the difficult challenges that dentists in particular are currently having to deal with. This is why we are doing everything we can to support you during these difficult times. Furthermore, we would also like to reassure our pensioners that we are in a sound position both organisationally and financially for weathering the current crisis and that there is absolutely no cause for concern.

 

Contributions

At the emergency meeting held on 23.03.2020, the administrative board decided to change the contribution payment intervals from quarterly, as set out in Art. 21 of the Articles of Association (AOA), to monthly payments, in 2020.

The administrative board has furthermore drawn attention to the fact that, pursuant to Art. 23 AOA, it would also be possible to defer contributions. As a result of the enormous economic consequences of the pandemic, the administrative board expects that members’ ability to pay contributions will be significantly impacted due to circumstances outside of their control, which means that an application for deferral would not require any extra supporting evidence. We would furthermore like to point out that our regulatory power does not apply to social security regulations, which means that the above does not affect employers’ obligation to pay the pension contributions for the dentists they employ.

 

No concerns over pension payments despite crisis

We have now taken the organisational measures required to ensure that we will be able to continue paying our members’ pensions even if we were no longer able to work in Münster.

In addition to the organisational side of things, we have also made sure that VZWL will have adequate cash flows. As a result, VZWL now has available liquidity in excess of €100 million – which is more than its entire annual pension payments – to ensure that it will be able to fulfil its obligations. VZWL has been able to ensure this liquidity without having to dispose of any securities.

In addition to the above, VZWL continues to be in a very stable financial position. And, while it is not possible for us to avoid the impact of the current crisis, we have also always elected to take a cautious approach. As things currently stand, this approach has actually enabled us to protect our dynamic capabilities in the current year.

The pandemic is presenting everyone with enormous challenges. At the same time, we are also currently reaping the benefits of our unique approach to industry-specific occupational pensions.

 

With best wishes & stay safe!

 

Jost Rieckesmann, Chairperson of the Supervisory Board

Dr. Ursula von Schönberg, Chairperson of the Administrative Board

VZWL reacts to low interest rates

Due to the continuing low interest rates, the association meeting held on 25.11.2017 amended the VZWL’s benefits regulations to reflect the current economic situation and decided to rewrite the Articles of Association. The VZWL had commissioned a comprehensive asset liability study, in which its performance obligations were matched against its economic endpoints, in advance of making the above changes. Although the VZWL has stable and very diverse capital investments, the study concluded that keeping the benefit entitlements at the previous levels on the basis of the current low, zero and negative interest rate environment would result in VZWL no longer being able to adequately guarantee that it would be able to cover its performance obligations in the future. In order for current pensions and the pension rights that VZWL’s active members have already acquired to be maintained at their current lavel, VZWL’s actuarial reserves will have to be increased by another €850 million. This increase will be financed through three channels: the benefit entitlements, the actuarial system and successive supplementary financing based on the model of the previous reduction of the actuarial interest rate. In terms of the benefit entitlements, the biggest of the changes arising from the above will be the change to the age limits. Under the previous Articles of Association, members were entitled to their full pension when they turned 65. For reasons pertaining to the protection of legitimate expectation, this rule will not change for any members born before and in 1958. For members born in 1959 and later, the age limit will henceforth increase by two additional months for each subsequent year, which means that the retirement age of the 1970 age group will now be 67. To avoid any gaps in members’ pension covers, it will also still be possible to grant members aged 60 up to 62 new disability pensions from January 2018 onwards. The contribution forecast will also reach up to that date. In addition to the above, the new version of the AOA also includes changes to the beneficiaries pension.

The most important change in this respect pertains to the widowers’ pensions. Under this change, widower’s pensions will generally decrease from 66.6% to 60% of the deceased’s entitlement. This change will also be introduced over a transitional period. Pensions that have already been set will not be affected by this change.

Everybody involved was aware that changes to the benefit entitlements would be a blow. For this reason, the administrative and supervisory board and a cross-fractional working group obtained comprehensive information and advice and worked very hard to try to avoid them. However, the asset liability study showed that the changes to the benefit entitlements were necessary, appropriate and also suitable for countering the challenges created by the low interest rates.

In addition to the changes to the benefit entitlements, the new version of the AOA is also geared towards a new actuarial system, which is the open funding plan method (offene Deckungsplanverfahren). This will ensure that the required supplementary financing will not just be provided by current members, but also by future generations of members. This move in particular is a reflection of our belief that it is important for our pension scheme to continue to appeal to the younger generation of our members. This is why the actuarial interest rate has been left at 2.25% and has not been further reduced.

The remaining supplemental financing that is required – which makes up about a third of the total financing required – will be provided by future surpluses over the coming years.

Due to the fact that the VZWL has undergone a fundamental change, the AOA have also been re-written.

Members will already be able to calculate how their pension entitlements will develop in future under the new AOA regulations in the coming months with our pension calculator, which is located on our member portal and is a secure feature. The pension calculator on our new member portal will come with a wide range of calculation options – from pension start dates to contributions – for all of VZWL's active members. In addition to the above, members are naturally always welcome to contact one of our advisers.

It has not been easy to make these changes because they are going to result in cuts for most of our members. However, at the same time, we also believe that it would be irresponsible to promise our members something that we might not be able to deliver because of current market developments. Due to the strict regulatory requirements, we also do not believe that attempting to compensate for the missing interest income through risky investments would be a way forward, because the VZWL is fundamental to most of our members’ retirement provisions, and this is not something that should be gambled with. For this reason, it is very important for the VZWL to be sustainable and to continue to be so.

 

Your VZWL