Members demand government rescue as German dentists’ pension fund faces €1.1bn losses

Based on the article I linked to in another comment, it does sound like they were required by the government to contribute to that particular fund, which then managed to lose a bunch of their money, so maybe one could feel that there's maybe some level of government responsibility.

https://deutschlandinenglish.com/p/german-dental-pension-funds-face-massive-losses-in-risky-investments

The VZB, whose membership is mandatory for dentists practicing in Germany, faces intense scrutiny for its asset management.

That being said, I agree that if they'd made exceptional returns instead of exceptional losses, they probably wouldn't very interested in giving up their returns.

No, that's not how it works here. Of course we are helping them once they reach rock bottom.

After they've sold their Porsches.

Well, half of their investment was lost.

searches

It sounds like they invested in luxury hotels, which then did not proceed to do well. Real estate investors often use leverage to crank up returns, which magnifies things upwards...but also downwards.

https://deutschlandinenglish.com/p/german-dental-pension-funds-face-massive-losses-in-risky-investments

• Approximately 10,000 dentists affected by VZB pension fund losses.
• VZB may have lost up to one billion euros due to risky investments, including bankrupt insurance and luxury hotel ventures.
• Pension fund of Niedersachsen also reported significant losses tied to real estate collapse.
• VZB considers legal action against Berlin Senate for oversight failures regarding pension fund management.

The pension fund of the Berlin Dental Association (VZB) is currently undergoing a financial crisis that threatens the retirement savings of approximately 10,000 dentists in Berlin, Brandenburg, and Bremen. The fund reportedly lost hundreds of millions of euros, with estimates reaching as high as one billion euros, representing nearly half of its assets. This severe downturn is largely due to risky investments, including an 80% stake in Element Insurance, which went bankrupt earlier this year.

Since 2022, the VZB has already written off 110 million euros combined from investments in various startups and luxury hotels situated in Ibiza, Sardinia, and Scotland. Many of these ventures are in serious financial trouble or insolvency. Additionally, the pension fund of the Niedersächsische Zahnärztekammer (AZN) recorded a 45 million euro loss in 2023 due to risky ventures as well, notably linked to the collapse of Signa Iduna real estate, connected to Austrian businessman René Benko.

I don't know what Element Insurance is. Searching online, I can find a trucking services company called Element in the US that spun up an insurance wing for trucks called Element Insurance Company, but that sounds like it's very new, and launched after the problematic Element Insurance went bankrupt.

looks further

No, sounds like the Element Insurance here is some German company that went bankrupt in 2024:

https://www.businessorbital.com/navigating-uncertainty-what-the-element-insurance-bankruptcy-means-for-320000-policyholders/

The unexpected bankruptcy of Element Insurance, a German insurance provider, at the end of 2024, has left approximately 320,000 policyholders in a state of uncertainty.

The bankruptcy of Element Insurance is further complicated by the company’s business model, which involved managing numerous policies through partnerships with various organizations. As a result, a substantial number of customers were inadvertently unaware of Element Insurance being their actual insurer. For those seeking further information, an extensive list of these partner companies, such as BMW Bank GmbH and Vodafone, is available on the designated insolvency information portal.

Schade has indicated that agreements have been secured with the majority of these partner companies to ensure they adhere to their contractual obligations. Nevertheless, challenges persist, as one specific company has reportedly refused to honor its commitments to Element and its customers. This refusal has led to legal proceedings initiated by the insolvency administrator within the Düsseldorf district court.

Element Insurance made its debut in 2017 as an innovative startup within the insurance industry, offering diverse coverage options that ranged from bicycle, accident, and household insurance to car repair, pet, and smartphone insurance. The company’s swift rise and subsequent bankruptcy highlight the volatile nature of the insurance sector, especially for emerging businesses.