Germany’s Riester pensions start to take off
GERMANY – Sales of the so-called Riester pensions seem to be taking off, according to new figures from insurance firm AMB Generali.
AMB Generali recorded a jump in sales of Riester Rente – a third-pillar pension subsidised by the government – during the first quarter of 2005.
AMB said it sold 38,000 Riester pensions in the first quarter – a rise of 43% compared with the first quarter of 2004. All told, the insurer said it had sold 822,000 Riester pensions which equalled more than €290m in terms of adjusted new business.
AMB Generali noted that the strong demand for the Riester pension was partly a result of the improvements made by the government.
Last year, the government simplified the offering by allowing greater portability and streamlining the criteria for tax subsidies and lifting a requirement on monthly contributions.
The improvements became necessary to boost demand for the pension, which remains below predictions made when it was first launched in January 2002. At last count, 14% of the 30 million people in Germany eligible for Riester had signed up for it.
As indicated by AMB Generali’s example, however, demand for the pension seems to be gaining speed.
Stephan Gelhausen, spokesman for German insurance industry association GDV, said that while an update on total Riester sales was not yet available, “the positive trend at AMB Generali is probably reflected at other German insurers”.
Unlike fund companies, German insurers have been Riester’s prime beneficiary. According to GDV, 83% of the 4.2 million contracts sold have been insurance-related.
Separately, AMB Generali said its new Pensionskasse, or traditional German pension fund, took in €56.5m in contributions during the first quarter, reflecting an increase of 128% over the same period in 2004. As a whole, the insurer said its Pensionskasse had €1.24bn in assets.
The insurer added that its in-house asset manager had €8.15bn in third-party assets at the end of the first quarter, up from €7.88bn a year earlier.