German pension product sales to accelerate
GERMANY - With Germany’s election out of the way, pension product sales are expected to accelerate in Q4, according to Commerzbank Securities.
In a market briefing, Commerzbank said uncertainties surrounding the elections delayed many individual investments in Riester pension products. “(The industry) senses that many private investors might have waited until now to see if the opposition could come up with a more compelling product. These hopes are now dashed, and private pension product sales could now pick up before the end of the year,” Commerzbank said.
The take up in individual pensions in Europe’s largest economy has been fairly slow due to complex rules, and the opposition said it wanted to change and simplify existing reform. But in a highly publicised election last month, Chancellor Gerhard Schroder defeated Foreign Minister Joschka Fischer. As a result, Commerzbank said no immediate changes in pension reform are expected.
Commerzbank also forecasts corporate pensions, the second pillar products, to continue to dominate as these products are more attractive to investors. The potential of the third pillar is “somewhat limited,” it added.