Germany considers Riester revision
GERMANY – Social security minister Ulla Schmidt is examining how to simplify and boost the take-up of Riester personal pensions, in a U-turn from Chancellor Schroeder’s insistence last year that no changes would be made.
Talks are underway about how to encourage more citizens - including the self-employed - to take up private pensions. One issue being discussed is how to simplify the ways by which the Riester-Rente are taken up. The ministry is said to be “open to relevant proposals”.
Changes to the Riester-Rente process have become necessary. The take-up of private Riester pensions – named after labour minister Walter Riester - one year after their introduction has been below expectations. At the end of last year around three million Germans had signed up for one - significantly lower than Schmidt’s target of four million.
The slow take-up has been blamed on complex rules, and uncertainties over last year’s election results. It had been hoped that a new government would simplify the procedures, but Chancellor Gerhard Schroeder insisted that no changes would be made.
The U-turn will no doubt provide some relief, although Schmidt has given no clue about how any revision would occur.