Solvency Risks

Pension companies are required to have adequate own funds to be able to secure the claims of beneficiaries (entitled and recipients) as well as to ensure the pension company’s ability to function. A minimum yield reserve (MYR) is also required to be formed for commitments with a minimum yield guarantee, which is exclusively intended for covering the minimum yield. While the MYR counts towards equity capital, due to its special allocation, it is not considered as part of the minimum capital requirement.

A holistic view is necessary for assessing under supervisory law whether the minimum requirement is duly met. This joint consideration of available own funds and MYR then results in the legally required excess coverage of the minimum regulatory requirements.