DLA Piper advises Kölner Pensionskasse and Caritas Pensionskasse on their reorganization

DLA Piper has advised pension funds Kölner Pensionskasse and Caritas Pensionskasse, both mutual insurance organizations (VVaG), on regulatory matters in relation to the German Federal Financial Supervisory Authority (BaFin), on the arrangement and implementation of the restructuring concept as well as on the corresponding formal transition to liquidation status. In May 2019, the representatives' meetings of both pension funds already approved a restructuring concept to compensate for a balance sheet deficit. This created a solid basis for ensuring ongoing benefits for insured persons and guaranteeing pension payments in the future.

As a final step in the implementation of the restructuring concept, Kölner Pensionskasse and Caritas Pensionskasse have formally entered liquidation status on 31 December, 2020. At this time, the notices issued by BaFin in 2018 revoking the permission to operate the insurance business have become final. The notices were based on the fact that a financing plan had been submitted by each pension fund in the summer of 2018, which was not accepted by BaFin. In accordance with their business purpose, both pension funds will continue to process their members' existing pension contracts as planned and thus continue to operate for a very long period of time.

Kölner Pensionskasse and the Caritas Pensionskasse together have a total of around 55,000 pension members and pension recipients. Their contracts and pensions will continue to run, and the two funds will continue to exist - but as companies in liquidation or run-off. As a result, they are no longer allowed to sign new insurance contracts or extend or increase existing ones. While the board members of the Caritas Pensionskasse - a so-called small insurance association - will continue to be titled and act as board members, the former board members of the Kölner Pensionskasse will now act as liquidators for the so-called large insurance association.

DLA Piper has advised Kölner Pensionskasse and Caritas Pensionskasse since 2018 during the difficult restructuring period, in particular with regard to insurance supervisory law, corporate law and occupational pension law. This also included the representative meetings for the adoption of resolutions on the restructuring measures, which included the reduction of benefits for pension members and pension recipients.

The DLA Piper team was led by partner Dr Gunne Bähr (insurance regulatory law) and counsel Manuel Baroch Castellvi (insurance regulatory law and occupational pension law) and also included partners Dr Andreas Meyer-Landrut (corporate) and Dr Frank Roth (civil procedure law), counsel Dr Thilo Streit (public commercial law) and senior associates Dr Markus Kaul (civil procedure law) and Marx Dauth (corporate, all Cologne).