Special provisions on tied assets

(1) The tied assets may be invested only in 1. the forms of investment named in section 215(2), first sentence, points 1 to 7, and 2. other investments permitted under the statutory instrument issued under section 235(1), point 10. Beyond this, the tied assets may be invested only insofar as the supervisory authority, in the presence of exceptional circumstances, permits this temporarily in an individual case on application.
(2) Section 125(1), second and third sentences, and section 131 do not apply.
(3) Pension funds must report on their entire capital investments, broken down into new investments and holdings. The duties under section 126(2) remain unaffected.
(4) Contrary to section 127(1), first sentence, a temporary shortfall in the tied assets is permissible where 1. the articles of association contain a provision permitting a shortfall, 2. the shortfall does not exceed 10 percent of the minimum amount of the tied assets under section 125(2), and 3. the pension fund has agreed a tied-assets recovery plan under subsection (5) with one or more employers or third parties, and the tied-assets recovery plan has been approved by the supervisory authority. A provision under the first sentence, point 1, may be included in the articles of association only where they contain a rule under which insurance claims may be reduced. The provision may be included in the articles of association with effect for the existing portfolio.
(5) A plan to restore coverage of the minimum amount of the tied assets and to ensure solvency (tied-assets recovery plan) must set out how, following the occurrence of a shortfall, 1. coverage of the minimum amount of the tied assets is to be achieved within a reasonable period, which may not exceed ten years, and 2. it is ensured that the Solvency Capital Requirement and the Minimum Capital Requirement are complied with at all times. In addition, the tied-assets recovery plan must contain a legally binding commitment from the participating employers and third parties that they will make available the financial resources necessary to carry out the tied-assets recovery plan. In preparing the tied-assets recovery plan, the pension fund's particular situation must be taken into account, in particular the structure of its assets and liabilities, its risk profile, its liquidity plan, the age profile of the insured, and, where applicable, the fact that it is a newly established scheme. The tied-assets recovery plan requires the approval of the supervisory authority.
(6) The pension fund must review an existing tied-assets recovery plan at least annually. Where it determines that its implementation could be jeopardised, it must inform the supervisory authority without delay. Following the occurrence of a shortfall, the pension fund must inform the supervisory authority of the amount of the shortfall, and of the dates and amounts of the payments made by the participating employers and third parties, and must report regularly on the state of restoring coverage.
(7) Where the pension fund operates pension commitments covered by the insurance protection under section 7 of the Company Pensions Act, it must notify the insolvency insurance institution of an agreed tied-assets recovery plan without delay upon the occurrence of a shortfall.
(8) The supervisory authority may require an amendment of the tied-assets recovery plan, or revoke its approval, in particular where the pension fund's ability to meet its obligations can no longer be regarded as durably assured, or where the assumption that the Solvency Capital Requirement and the Minimum Capital Requirement will always be complied with is no longer justified.