Case law meets GenAI: The silent pacemaker of occupational pension schemes (bAV)

Employees can convert part of their salary into pension contributions. This process is called deferred compensation. The basis for this is Section 1a of the Occupational Pensions Act (BetrAVG).

The current draft of the ‘Social Security Calculation Parameters Regulation 2026’ provides for an increase in the contribution assessment ceiling (BBG). But what does this mean for employees, employers, insurers and pension providers? These questions are examined in this blog post.

Numerous laws apply to occupational pension schemes (bAV), foremost among them the Occupational Pensions Act (BetrAVG), which rarely change. However, this stability is deceptive: occupational pension schemes are significantly influenced by case law. Decisions by the Federal Labour Court (BAG), the Federal Court of Justice (BGH), the European Court of Justice (ECJ) and the social courts are constantly refining the framework. Insurers and companies must continuously monitor these developments, examine their relevance to their own business, evaluate them thoroughly and implement them consistently. Otherwise, there is a risk of considerable liability, costs and reputational risks if changes are overlooked or implemented incorrectly.

This is particularly evident in typical points of contention: The adjustment test pursuant to Section 16 of the Occupational Pensions Act (BetrAVG) is the touchstone for the economic situation, systematics and documentation. Indemnification obligations for external implementation channels show that outsourcing does not mean exemption from liability. The requirement of equal treatment and the prohibition of discrimination demand clear, objectively justified differentiations. Ineffective clauses in pension schemes reveal the sensitivity of every formulation. And the distinction between deferred compensation and employer-financed occupational pension schemes determines the consequences in terms of tax, social security and liability law.

The consequence is as sober as it is compelling: even without a change in the law, a single ruling can suddenly call established occupational pension structures into question – or at least expose them to new risks. Those responsible for occupational pensions must therefore not only be familiar with the relevant sections of the law, but above all closely follow ongoing developments in case law, evaluate them professionally and translate them into comprehensible regulations, processes and documentation.

Challenges in practice

Many companies lack transparency and a clear classification of case law. Reports are noticed, but without a structured assessment, it remains unclear whether and to what extent their own occupational pension schemes are affected. As a result, the scope and speed of the effects are regularly underestimated – especially in the case of retroactive effects or when guidelines effectively set new standards in practice. Specialist departments hesitate because responsibilities, review steps and escalation paths are not clearly defined. The result is delayed reactions that are only triggered by lawsuits, audits or deadline pressure – with predictable consequences: too late, too expensive, too risky.

Structured process for reviewing and validating case law

A clear, repeatable process is needed to turn uncertainty into controllable action.

The solution begins with a professional relevance check that translates legal reports into reliable decisions. It clarifies whether a ruling affects the company's own implementation channels, types of commitments or specific groups of people, whether it applies to new commitments, current commitments or old commitments – and with what time depth. It quantifies the financial consequences – additional provisions, additional costs or refinancing risks – and anchors them in corporate planning. And it translates the findings into concrete measures by precisely defining which processes, communication modules and documents need to be adapted, where, by whom and by when.

Without this structure, case law remains an abstract risk that only becomes visible when it becomes expensive. With a consistent relevance check, uncertainty is transformed into targeted action: responsibilities are clarified, priorities are set, and adjustments are made in a traceable and audit-proof manner – quickly enough to limit risks and exploit opportunities. This process creates clarity, speed and audit security – provided it is consistently implemented.

Typical effects of current occupational pension case law

Even if judgements vary in detail, the consequences are very similar. First, the focus is on regulations and contract documents: on the employer side, pension regulations; for insurers, general terms and conditions of insurance, collective agreements, product information and policy texts. Wording that was unremarkable yesterday must now be clarified, supplemented or reworded. This is almost always accompanied by stricter information and advisory obligations – notices, guidelines, information sheets and advisory procedures are consistently brought up to the new standard.

At the same time, the need for documentation increases. Companies must provide complete evidence of who was informed about what and when, on what basis decisions were made and how calculations were performed. Insurers store the corresponding evidence in CRM, advisory and portfolio systems – including protocols, offer/policy statuses and clear versioning. Corrections to calculations are also often necessary (pension factors, adjustments, subsidy logic). This affects HR/payroll and the actuarial and operational areas of insurers: Processes are refined, audit steps are added, parameters and calculation cores are adjusted, and releases are planned in a disciplined manner.

The financial dimension is noticeable on both sides: companies examine additional costs, additional provisions and possible refinancing. Insurers evaluate effects on reserves and pricing, for example, and profit sharing and portfolio management are adjusted as necessary. Operationally, clear responsibilities and robust processes are needed; in external implementation channels, responsibilities along the chain must be clear.

The time factor is particularly critical. Many judgements have retroactive effect – for example, in the case of current pensions or vested benefits. What begins as legal development quickly turns into additional payments, adjustments and communication obligations. Those who check early, document clearly and implement in a structured manner reduce liability and reputational risks and avoid operational chaos and expensive correction loops. This is accompanied by a need for training: HR, payroll and managers, as well as internal/external sales, service and performance review teams, need compact learning modules and clear decision-making aids.

Support from GenAI – from analysis to implementation

Generative artificial intelligence unfolds its added value precisely at the interface between complex case law and operational implementation – for companies and insurers alike. It reads judgements, justifications and supervisory announcements, links them to specialist articles and condenses scattered sources into usable knowledge. It assigns this to specific occupational pension constellations: implementation methods, types of commitments and groups of people on the employer side; for insurers, it also includes general terms and conditions clauses, tariff generations, product modules and portfolio segments. This quickly clarifies what is affected, to what extent, where immediate action is required and where monitoring is sufficient.

The AI generates specific recommendations for action from the structured classification. Companies receive clear instructions on which passages of the pension scheme regulations need to be amended, which communication modules need to be created or updated, and which review steps need to be introduced in HR and payroll – each with a reliable source base and binding deadlines. Insurers receive parallel derivations for product information, application and policy texts, advisory routes and broker documents – including specific adjustment proposals and priorities.

The combination of AI-supported analysis and RAG search ensures that new impulses are recorded, evaluated and prioritised on a daily basis. The entire process – from identifying relevant case law to relevance checks and implementation – is thus accelerated, while correction loops are significantly reduced. At the same time, a living knowledge base is created: a searchable case law library in which judgements are stored with metadata, impact tags and links to internal policies, processes and templates.

For insurers, this system is supplemented by product generations and affected portfolios, enabling targeted portfolio scans and serial communication. GenAI is a real game changer: LLM-supported recording and RAG search bring daily order to judgements and supervisory announcements, prioritise according to clear relevance criteria and deliver initial impact drafts based on reliable sources.

Used correctly, GenAI is much more than a ‘nice to have’ – it measurably accelerates the end-to-end process, from identification and evaluation to implementation.

At the same time, GenAI strengthens knowledge management: scattered sources are combined to create an internal, searchable case law database. Decisions are stored in a structured manner with metadata, keywords and links to internal policies. This reduces duplication of work, increases transparency and makes recurring evaluations consistent and traceable.

Important: Humans remain responsible

GenAI is an accelerator and quality framework – not a substitute for legal review. It shortens analyses, increases consistency through uniform review logic and reduces blind spots by broadly and systematically incorporating relevant sources. However, the final decision and implementation remain with the specialist departments and their consultants. GenAI prepares, structures and visualises – experts decide.