Germany’s Social Association (SoVD) criticized the private pension reform bill that the ruling black‑red coalition tabled in the Bundestag on Thursday, arguing that the country should instead strengthen the statutory pension scheme.
Chairwoman Michaela Engelmeier said the latest attempt at a state‑guided private pension system has “floundered miserably”. She noted that the Riester pension never achieved its intended goal: only about one‑third of workers covered by the social security system actually make an additional private contribution, and the scheme has largely benefited insurance companies.
The SoVD urges continued reliance on the state pension. It says the results of the coalition‑appointed pension commission-expected mid‑year-should be awaited before deciding on reforms.
According to Engelmeier, the proposed private pension product would be simpler, more transparent and cheaper than Riester, but the cap on administrative costs of 1.5 percent is too high. She pointed out that Sweden’s state‑run pension fund manages at about 0.1 percent in expenses, far more cost‑efficient.
Even with the reform, the fundamental issue remains: people who have no money left to save cannot accumulate additional retirement funds, even with incentives. Therefore, a robust statutory pension is essential, Engelmeier said.
Riester contracts have recently slowed, prompting the federal government to seek ways to make private pension schemes more attractive again.