Accounting for change

German pensions

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Despite the remorseless march of globalisation in financial services, a large portion of German companies still use unfunded book reserves to pay their pension promises - a stark contrast to the funded approach favoured by their major economic rivals. According to rating agency AM Best, even several years after the wholesale switch to IFRS accounting by headline German corporates, such as BMW and Bosch, over 50% of the country's occupational pension liabilities are still in the form of direktzus