Consumer advice centers are pushing for more rewarding private pensions. "I appeal to the federal government to make 2020 the year of the pension reform," said the head of the Federation of German Consumer Organizations (vzbv), Klaus Müller, the German press agency. There is a great opportunity to fundamentally reform the Riester pension, which is well-meant but badly done. Practical proposals were on the table as to how it could be better in a low interest rate phase with an acceptable risk in old age than the Riester pension has so far offered.
The consumer advice centers have been promoting a state-organized standard product for a long time and have presented a concept for a so-called "extra pension". Accordingly, employees should automatically pay into the pension scheme through their employer - unless they object. A public agency should then use fund invitations to instruct fund managers to invest the money on the capital market. Then banks and insurance companies would no longer earn money on sales commissions, said Müller.
The vzbv boss emphasized that there is a high level of acceptance for the statutory pension. "It wasn't always like that, it was deliberately bad talked by banks and insurance companies." At the same time, there was great potential in private provision. In the new year, among other things, a pension commission is to make suggestions from experts on behalf of the federal government.
More on the topic at SPIEGEL +
Many Riester contracts on ice
Many savers in Germany struggle with the state-funded Riester pension. According to current estimates by the Federal Ministry of Labor, every fifth Riester contract is currently on hold. This emerges from a response from the federal government to a small request from the FDP parliamentary group in the summer. So investors no longer pay contributions, but have not terminated their contract because they would otherwise have to pay back government grants.
You can find tips on private retirement provision at SPIEGEL in the following articles from this year:
- Tax liability: How you can keep as much of your Riester pension as possible
- Young Money Blog: This is how much you should save for retirement
- Avoiding poverty in old age: Where there is a problem with retirement