Germany Investment and Pensions

A commission of pensions experts has recommended a so called ‘Generationenkapital’ scheme that would invest 2% of salary into personal first-pillar pension accounts – akin to Sweden’s PPM. German asset managers are eyeing opportunities on two fronts. Legislation to improve occupational pensions came into force in January 2026 (BRSG II), aiming to boost supplementary retirement coverage – which currently stands at 52%. The reforms aim to make it easier to set up ‘social partner’ DC pension schemes, which were created in 2018 but with extremely lacklustre interest to date. The changes also aim to make pensions more portable, and Pensionskassen receive more freedom to invest. In January 2027 the old regime of ‘Riester’ partially capital guaranteed savings products will be replaced with a so-called ‘Altersvorsorgedepot’ – a suite of “more flexible, higher-returning and cheaper” products, according to the Finance Ministry – with or without guarantees. S&P Global Ratings, predicts additional annual fund management inflows of €26-56bn by the end of 2028. The so-called Deutschlandfonds is a government initiative that aims to raise €130bn from private investment sources for projects including venture capital, critical materials, SMEs and energy.