2023-07-20 18:27:27
After half a year of work, the package of proposals from the focus group on private old-age provision was handed over to Ministers Heil, Lindner and Habeck on Wednesday. By consensus, scientists, industry associations and their state secretaries had set the course for the future system of support for old-age provision products. Habeck’s ministry and the Federation of Consumer Organizations had advocated a sovereign wealth fund, but were overruled.
Philip Krohn
Editor in business, responsible for “People and Business”.
The paper met with goodwill both within and outside the group of participants. Unlike the share pension in the statutory pension system advocated by the FDP with its compulsory contributions, it was not possible to establish an obligation in the third pillar of old-age provision, said Oskar Goecke from the Technical University of Cologne, who took part in the talks.
“Here it can be better solved privately. Only if there is no competition can you think about a sovereign wealth fund again,” he told the FAZ. However, the solution would still enable the insurance industry to sell “overpriced, unprofitable and inflexible” products, the Association of Insureds criticized in a statement. “It’s annoying because the Riester system suffered from it right from the start,” said CEO Stephan Rehmke.
Two obligations from the Riester subsidy are no longer applicable
The fund industry sees the result as a success. In the future, two central obligations of the subsidized Riester pensions will no longer apply: the contribution guarantee and the pension payment until the end of life (life annuity). “The report shows the paradigm shift in private old-age provision,” said Thomas Richter, General Manager of the industry association BVI, after the publication.
Martin Stenger, who is responsible for old-age provision solutions at asset manager Franklin Templeton, shares his broad agreement. He was surprised that sustainable investments were not made more mandatory. Insurance brokers have had to determine customer preferences since last August and fund brokers since April. “The intermediaries suffer from the query,” he told the FAZ. “Neither in the case of the share pension did the state take care of a high rate nor here.” That would have to be taken into account by lawmakers.
Stenger said it was positive that the state was reacting with more flexibility to changing employment biographies with unstable CVs. Retirement provision no longer only takes into account what is paid out monthly for life. This makes it easier for both fund companies and insurers to plan their retirement for their customers.
With long maturities, equity risks are manageable
The cross-pillar representation of the pension entitlements of all insured persons, which has just been completed, is somewhat more conventional, but can be expanded to include this changed perspective with additional data. He sees the insight shared by all participants as a very important element of the report that the risks of investing in equities are manageable with long maturities.
The assessment of the insurance industry is not quite as positive. With the guarantee and life annuity, it loses a previously existing unique selling proposition through which it was able to achieve high market shares. “Unfortunately, the importance of lifelong pensions and minimum guarantees for people is underestimated,” said Jörg Asmussen, CEO of the industry association GDV.
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“For us, retirement is an important building block in preventing old-age poverty,” said Laura Müller, who is responsible for life insurance business as a board member at Debeka. However, she believes that she can score points in the competition with annuity products. “We will compete with fund companies, and I am convinced that we have the better concept.” Debeka has not had any Riester products on offer since 2020 because they could no longer be made profitable.
“But we have always been a fan of Riester and said that the administration of allowances had to be simplified,” said Müller. The legislation should therefore now be started as soon as possible. Most observers expect that a Riester reform will spark new momentum. The number of providers should increase noticeably and the costs should be kept within limits. However, most people do not believe that a product that is sold entirely without advice is possible.
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