German insurers bullish on pension revolution
GERMANY - The association of German insurers says pension reform could lead to a revolution in the German financial landscape.
"Huge financial volumes might provide a revolution in the German financial landscape," Michael Wolgast, the association's chief economist, said in a presentation this week. Germany was "on the bumpy road to more funded pensions provision" he said.
But he said changes in the labour market might eventually trigger a
'renaissance' in employer-sponsored pensions. He added that more measures to enhance the effectiveness of occupational pensions should be implemented.
He added that the Riester reforms and vehicles for occupational pension provision would be "nucleus" for a new funded system - with the insurance and pensions industry in "pole position" in the future market.
Speaking at a conference organised by the American Council of Life Insurers in London, Wolgast admitted that Riester had not met expectations - and that workers have displayed 'mixed feelings' over the range of alternative pension products.
He said insurers had doubts over the high administrative costs - which remain "unsolved".