2 to 3 percent costs, hardly any return, billions sunk into guarantee funds – the Riester pension was a disaster. Now comes the retirement savings account and promises: everything will be better. It’s understandable that many people think: Will this be another failure? We examined the strengths and weak points – without sugarcoating.
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Why Riester failed
The basic problem with the Riester pension was the mandatory contribution guarantee. Providers had to repay at least the contributions paid at the start of the pension. To finance this guarantee, the majority of the money went into low-interest bonds. There was hardly any room for stocks. At the same time, product costs were typically 2 to 3 percent per year – acquisition fees, administration costs, warranty costs. After deducting these fees, there was often less of the already meager return than in the current account.
In addition, there was a support system that was so complicated that many of those entitled to it did not even make full use of their allowances. More than one in four Riester contracts have now been terminated or closed.
When the retirement savings account starts on January 1, 2027, Hundreds of thousands of savers try to open a portfolio at the same time. The result: overloaded systems, long waiting times for identity verification, delayed activations. And every day of delay is a day without funding – because the allowances do not flow retroactively. Anyone who opens a free account at finanzen.net ZERO nowhas already completed the identity verification and can get started straight away on January 1st – no queue, no missed funding.
What actually makes the retirement savings account different
Three design errors by Riester are corrected.
First: No mandatory contribution guarantee. Savers bear the capital market risk, but can invest up to 100 percent in stock ETFs. Historically, the MSCI World has delivered positive returns over every 15-year period since 1970. If you still want security, you can voluntarily choose a guaranteed product with 80 or 100 percent premium retention.
Second: Significantly lower costs. In the retirement portfolio, savers can choose cheap ETFs themselves, which typically cost 0.1 to 0.2 percent per year. According to the coalition agreement, the cost cap for standard products is 1 percent – down from the originally planned 1.5 percent. In addition, a public provider will offer its own standard depot, which is likely to increase cost pressure across the entire market.
Third: simpler and higher funding. Instead of complicated minimum personal contributions, there is a clear formula: 50 cents per euro up to 360 euros per year, 25 cents for each additional euro up to 1,800 euros. The full child allowance of 300 euros per child is achieved from just 25 euros per month. And for the first time, all self-employed people are also eligible for funding.
Where legitimate criticism continues
Nevertheless, there are weak points. The cost cap of 1 percent is still significantly higher than what a cheaper ETF costs. Over 40 years, the difference between 0.2 and 1 percent costs amounts to around 65,000 euros. Anyone who doesn’t choose the ETF themselves will still pay a high price for convenience in the standard product.
Whether the public standard depot solves this problem depends on how cheap it actually becomes – there are no specific conditions yet. And whether low-income earners with very small savings rates of less than 25 euros per month are better off in the old Riester system must be examined on a case-by-case basis.
Rip-off or progress? The honest comparison
| feature | Riester pension | Retirement provision deposit (after agreement) |
|---|---|---|
| Typical costs/year | 2-3% | 0.1-1.0% |
| Equity quota possible | Usually less than 30% | Up to 100% via index funds (ETF) |
| Payout | Min. 70% retirement | Freely selectable |
| Basic allowance | Fixed €175 | Up to €540 (50 cents/€) |
| Full child allowance | 60 €/year | 25 €/month |
| Self-employed people | Excluded | Eligible |
Riester contract transferred and up to 540 € funding secure.
From 2027, your Riester balance can be transferred to a retirement savings account with our broker finanzen.net ZERO – all previous allowances remain intact. Register now so you can be ready on January 1st.
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Conclusion: No second Riester
The retirement savings account is not Riester 2.0. The abolition of the guarantee requirement, the lower costs, the higher funding and the opening up to the self-employed are substantial improvements. Not perfect – the cost cap could have been lower, and it remains to be seen whether the public standard depot keeps what it promises. But for informed savers who choose cheap ETFs themselves, the portfolio is already significantly more attractive than anything Riester has ever offered.