Weaknesses in the pension schemes: The high costs of Riester policies

The state-sponsored private retirement not only suffers from the low interest rates. She wears also a cost problem. This is exacerbated by the low interest rate. A on Thursday published a study of the movement of citizens and financial turnaround shows the proportions. A quarter of all paid-in contributions and allowances fins according to the investigation in to the costs of the provider and not in the rate of return for the savers. Every third examined Police, there were even more than 30 percent.

Philipp Krohn

editor in the business, responsible for "people and economy".

For the study of financial turnaround has examined 65 of the Riester policies of insurers. The data, derived from sample product information sheets for the provider in accordance with the requirements of the production information place of retirement (PIA), the certified offerings on behalf of the state. It was assumed that a 37-year-old savers for the next 30 years to pay 1200 euros including allowance in the policy. The authors criticize the high cost. "This is a multiple of the 10 percent that the Federal government models in", - stated in the study.

Because of the high cost and the poor return on fixed income investments, the earnings prospects are bad. Riester-products with less than 15 percent of the cost burden, however, to the part of the return is weak. "In General, the customer's rate of return after cost of under 0.5 percent. In one case it is 0 percent“ to criticize the authors.

Projected yield to maturity is below the rate of inflation

The 67 pension insurance would, on average, to a possible (predicted) yield to maturity of 1.6 percent. This is below the average inflation rate for the past 30 years of 1.8 percent. However, you can stop here, contrary to the authors that Inflation is currently parallel to the low interest rates are also particularly low, so that the real rate of return is currently positive. How the Inflation will be up to the end of the term, cannot be predicted.

The Association of the German insurance economy (GDV) responded promptly to the inquiry. The financial turn-representation does not show the costs that will be deducted from the contribution. Instead, various costs relating to the capital investment that would Fund costs that rise with the value of development involved including. "Methodologically, the difference between the theoretical savings capital, without costs compared with capital costs (Reduction in Wealth method)", - said the Deputy GDV managing Director Peter Schwark by the F. A. Z.

In this way, the percentage of the moon would generate "values". Long lead times and high investment returns by this method to increase costs."Unlike the suggested ratio is in such a fictitious costs for more than 100 years of life and good income over 100 percent of the contributions is possible without that the performance would be at the same time is Zero or Negative," said Schwark.