The Riester pension started very successfully in 2002 to relieve the statutory pension insurance and as a well-funded entry into a private, funded supplementary pension. But in addition to the high bureaucratic hurdles, the state-prescribed capital guarantee in the products is proving to be a heavy burden. Because the costs of this guarantee rise in reverse with the falling interest rates. The Riester contracts based on equity funds must also guarantee this guarantee. The lower the safe interest rate, the less capital can be invested in the profitable stock markets even with these contracts.
Against this background, the costs of the contracts are offset by ever lower income. In the last legislative period, too, politics was unable to bring itself up to enable the millions of Riester savers to reform their treaties. There were very sensible concepts on the part of insurance companies and banks to make Riester contracts much more attractive for savers without additional costs. In protest against the indolence of politics, various providers stopped the already very low level of new business for Riester contracts this year.
However, you should not misinterpret these signals: First of all, all investors have made good business thanks to the allowances and tax advantages in the past, even without significant interest on their payments into Riester contracts. This also applies to the payments made in the current year. Anyone who no longer saves their contract now waives the state subsidy, or whoever terminates his contract must repay the entire subsidy that has accrued over the previous term to the state.
A major advantage of the Riester contracts has always been that it is possible for investors: with low costs and without any other disadvantages, to switch to another provider or to another contract with the money saved. Against this background, there is no reason to forego state funding this year. We expect that there will be a reform of state-subsidized old-age provision in the coming legislative period, which will then also be open to the existing contracts. Against this background, we recommend that you take advantage of the allowances and tax advantages of your Riester contracts in 2021 as well. As soon as the new framework conditions and specific product alternatives are available, we will inform you and show you your options for changing and optimizing.
We would be happy to answer any questions you may have on the subject of “state-subsidized old-age provision”.