Before the new pension law was brought to the Bundestag this Thursday, consumer protection advocates warned that the private pension scheme was likely to fail again. “The story repeats itself” said Niels Nauhauser from the Consumer Advice Center Baden‑Württemberg to the “Süddeutsche Zeitung” (Thursday issue). “With this reform, private pension will fail again”.
Finance Minister Lars Klingbeil (SPD) aims to correct the shortcomings of the unpopular Riester pension. The new law still permits the private sale of financial products. Nauhauser criticized the lack of change for laypeople, noting that “they will remain at the mercy of financial intermediaries, who will sell what offers the biggest commissions”. He argued that the Federal Ministry of Finance is advancing a financial lobby’s agenda. As with Riester, society will discover in ten years that private pensions still do not work for many citizens. He called for a state‑run fund modeled on Sweden instead.
The cabinet approved Klingbeil’s plans in December. In addition to existing guaranteed products, the reform introduces a new pension savings account that promises higher returns in the capital market. The new products will become available from January 2027.