The German governing coalition will soon discuss options to further develop the country’s third-pillar pension system Riester-Rente, a spokesperson for the Federal Ministry of Labour and Social Affairs told IPE.
The governing parties CDU/CSU and the German Social Democratic Party (SPD) have agreed in the coalition pact to improve private pension provisions to make it more equitable, the spokesperson added.
A dialogue has taken place with providers of Riester-Rente pension products, associations for the protection of consumers and social partners, the spokesperson said.
The government coalition will review the Riester-Rente based on discussions with those organisations and against the background of recommendations by the Rentenkommission.
The Rentenkommission, a panel with representatives from the governing parties CDU/CSU and SPD, and trade unions, believes the Riester-Rente supplementary system had stagnated in recent years.
“No determinations [on reviews] have been made yet,” the spokesperson said. Parties can meet as soon as Monday to discuss possible changes to the Riester-Rente.
IPE understands that a meeting between the finance and the labour ministries will also take place to elaborate a proposal for a reform – both will have to agree before bringing a proposal for a reform to the Cabinet. The Finance and the Labour ministries declined to comment on this matter.
The German ministry of finance was already working with insurance companies and banks to evaluate possible changes to the Riester-Rente.
The CDU/CSU faction is demanding a reduction of guarantees on Riester-Rente products and requesting simplification of the process to request a supplement. It also wants an expansion of the number of people eligible for the Riester-Rente to include self-employed and a cap on administrative costs, IPE has learnt.
Wirtschaftsforum der SPD e.V, a business association backed by the SPD, proposed last summer an overhaul of the Riester-Rente, asking for a transition to “flexible guarantees” to support investments in equities and funds with stock options.