Germany to replace Riester-Rente with new pension depot in 2027

Germany is set to phase out the Riester-Rente pension system, a central component of private retirement savings since 2002. Following decisions by the German Bundestag and the Bundesrat, the reform is scheduled to take effect on January 1, 2027.

The existing system, which includes approximately 15 to 16 million contracts, will be replaced by a new retirement savings depot (Altersvorsorgedepot). This new model will allow citizens to invest in stocks, funds, and ETFs with state subsidies applied directly to the capital market, rather than the previous subsidy structure.

Transitioning to the new system involves several considerations for savers. While existing subsidies can be preserved when transferring Riester assets to the new depot, the process may take several weeks. Experts note that delays in opening new accounts or processing transfers could lead to periods where funds are not earning interest or receiving subsidies. Additionally, savers face choices regarding whether to cancel existing contracts or transfer them, with the German Pension Insurance advising caution due to potential financial consequences regarding capital protection and payout structures.