GERMANY – The volume of company pension schemes in Germany is expected to double in the next ten years, from €330bn to €660bn in assets, largely as a result of the introduction of the second phase of the Riester pensions reform this year, says Allianz, the Stuttgart-based insurance and banking group.

Allianz believes the majority of the new schemes will be for traditional insurance funds, even though the reforms have opened the market to funded-style pension schemes.

“There will be growth in this product area, as well, though we predict that only 20% per cent of new retirement plans will be Anglo-Saxon style pension funds by 2010,” says an Allianz spokesman.

Elsewhere the private market, which was the target of the first phase of the reforms last year, has got off to a good start acccording to Allianz who suggests 2001 sales figures show the German public’s readiness to save for their retirement.

Allianz says that as for occupational schemes, the Germans are still putting their faith in traditional insurance funds, rather than fund-linked annuity schemes and Anglo-Saxon style pension funds. Some 90% of the new Riester contracts it sold were insurance products.

“In general, we are not surprised by these figures, since Germany’s pensions culture is closely linked to insurance. says the spokesman.

However, there is a downside, as Allianz believes that in the short-term, other insurance products may suffer as a result of the flight to pension products, and these won’t generate profits for at least another eight years.

“People are unlikely to take out more than one contract at a time, so other areas of our business may initially suffer,” says the spokesman. “But although the new pensions probably won’t become profitable for another eight to twelve years, we are not too concerned. Eventually, it will balance itself out.”