German pension funds face bill of up to $870mn over cum-ex scandal
A survey by Germany’s financial regulator Bafin found 21 insurance companies and pension schemes were affected by at least one transaction in the scandal which involved tax loopholes on dividend payments (Alex Kraus/Bloomberg)
Germany’s cum-cum and cum-ex transactions, at the heart of one of the country’s largest tax scandals, could see insurance companies and pension funds face a financial burden – including tax liabilities – of around $874mn, according to new data from financial regulator Bafin.
As briefly as possible, the cum-ex scandal has hit several countries in Europe but Germany is the worst affected. It involved a loophole on dividend payments which allowed several parties to claim the same tax refund – with banks selling shares before a dividend was paid out but delivering it after it had been paid, allowing both parties to the transaction to claim tax rebates on capital gains tax which had only been paid once.
The figures, featured in a recent Bafin survey, offer an insight into the tax scandal’s impact outside the banking sector. Conducted between December 2025 and March 2026, the survey covered 1,267 credit institutions, 542 insurance companies and pension schemes and 58 companies in the securities sector.
In total, 73 credit institutions, 21 insurers and pension funds, and 12 companies from the securities sector said they were affected by at least one of the transaction types.
Nearly all of the insurance and pension sector’s reported potential financial burden relates to cum-cum, at $862mn, with around $12mn attributable to cum-ex.
Across the three sectors, the total financial burden could be $8.1bn.
Bafin said 41 per cent of the total burden represents potential future liabilities, with 59 per cent relating to payments that have already been made, leaving the final burden uncertain.
The GDV, Germany’s insurance industry association, told AOX it does not have its own figures on the actual financial impact.
“The GDV views such tax arrangements, and cum-ex in particular, very critically and rejects them. Nevertheless, we assume that there is no reason to fear any impact on policyholders or their retirement provision,” a spokesperson said.
Bafin highlighted that, based on the findings, none of the companies surveyed is considered to be at risk of insolvency.
The regulator’s next steps involve conducting a more detailed review of each company’s findings, including, where necessary, its governance, tax risk management and the role of individuals.