What is the purpose of the service for individual retirement accounts?

Pension account: better than the Riester pension?

The old-age provision account is intended to replace the Riester pension in the state old-age provision - this is what some consumer advocates are now demanding. But what would the advantages of this retirement account be?

Riester pension under criticism

The Riester pension is now a widespread product for old-age provision in Germany. But since it was introduced in 2001, it has always been the focus of public criticism. One reason: the return on contracts is often as bad as with the savings stocking, complains the German Institute for Economic Research (DIW), according to SWR.

The consumer magazine "Öko-Test" has also been criticizing the Riester pension for several years: The financial products offered for this purpose are opaque, expensive and inflexible. In addition, Riester pensions are often calculated with excessively long life expectancies, the consumer magazine criticizes. His conclusion is therefore: "Abolish the Riester pension, introduce a retirement savings account."

Benefits of a retirement account

According to its own information, "Öko-Test" and the Baden-Württemberg Consumer Commission have been calling for a pension account for consumers since 2010 so that more of the state funding actually reaches the insured. The pension account should be simple, inexpensive and transparent, as it is offered, among other things, by a non-profit institution that does not want to earn from it itself, according to the requirement of "Öko-Test".

One possibility for this would be the Deutsche Rentenversicherung Bund. According to "Öko-Test", the saved capital should be inheritable, which is not the case with all state-sponsored pension insurance contracts.

Don't just terminate the Riester contract

Other consumer advocates also criticize the previous design of the Riester pension, but not all of them reject the product in principle. Among other things, the consumer magazine "Finanztest" continues to support the Riester pension, reports the SWR, as does the Rhineland-Palatinate consumer center.

The latter is more concerned that consumers will, in the worst case, terminate their existing contract due to the bad press about the Riester pension, according to Josephin Holzhäuser, financial expert at the Rhineland-Palatinate consumer center, told SWR. In their opinion that would be the worst solution. Consumers should rather think about a change of contract or the discontinuation of premium payments.