GERMANY – Only 1.9m people of a potential 31m have taken out a new private Riester pension plan since they were introduced at the beginning of the year, prompting criticism in the German asset management and insurance industries that the Riester reforms are not working, says German daily financial newspaper, Handelsblatt.

Handelsblatt says that Norbert Heinen, chief executive of life assurance group Gerling, believes the government’s marketing of the reforms, which are primarily designed to stimulate the supplementary pensions market in Germany, is inadequate.

Elsewhere, Maximilian Zimmerer, chief finance officer of Allianz, the market leader in the new Riester private pension market, is quoted as saying the continuous debate about the disappointing uptake of the new schemes could be counterproductive. “It would be fatal if consumers were further unsettled by this discussion,” he says.

Moreover, he feels the reforms need simplifying in order to make the plans more attractive to savers. “We have to focus on the core issue of encouraging people to save more for their old age.”

Peter Koenig, executive director of Morgan Stanley Dean Witter in Frankfurt, agrees that the reforms need some tweaking but is surprised by Zimmerer’s concerns about the take-up rate of Riester pensions.

“I am mystified by Allianz’s criticisms, since it was Allianz that said the take-up rate would be slow at first and it would be a few years before insurance companies began to break even, let alone make profit from Riester pensions,” he says.

Moreover, Koenig suggests it’s too early to draw conclusions about the success of the Riester plans. “Maybe people are just being rational and waiting to see how the market develops. The Handelsblatt article doesn’t mention the other new pensions products that have also flooded the market this year. People might prefer those to the new private pensions schemes.”