Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/57983 
Year of Publication: 
2012
Citation: 
[Journal:] DIW Economic Bulletin [ISSN:] 2192-7219 [Volume:] 2 [Issue:] 2 [Publisher:] Deutsches Institut für Wirtschaftsforschung (DIW) [Place:] Berlin [Year:] 2012 [Pages:] 3-13
Publisher: 
Deutsches Institut für Wirtschaftsforschung (DIW), Berlin
Abstract: 
Since their introduction, the Riester pension scheme and the individual Riester products have become less beneficial to savers. Contracts concluded today will often lead to lower returns compared to contracts concluded in 2001. From a social perspective, meaning pension benefits in relation to individual saving contributions plus state subsidy, overall returns on all insurance-based products are very low. This is due to the general decline in returns on the capital market and, in particular, to a series of government-mandated certification and calculation rules. Urgently needed structural reforms include the abolition of exchange costs, standardized cost information, certification with regards to content instead of formal certification and the regulation of calculation methods. In addition, limiting the number of products is also recommended. Given the shortcomings of the Riester system, there is good reason to fundamentally rethink old-age pension provision policy. In doing so, a targeted reduction or even elimination of extra public funding ought not to be taboo. The tax saved could be used to strengthen the pay-as-you-go state pension scheme.
Subjects: 
private pension provision
Riester scheme
funding principle
welfare state
JEL: 
D18
D82
D91
E21
H55
Document Type: 
Article

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