Study reveals: Riester and Rürup pensions only for 100-year-olds?

Study reveals: Riester and Rürup pensions only for 100-year-olds?

The question of the best pension provision is becoming increasingly difficult to answer in times of constant political discussions and reforms. A recently published study suggests that neither the Riester nor the Rürup pension are a good choice unless you reach an exceptionally old age. A total of 111 state-subsidized retirement products from Riester and Rürup pensions were examined by the non-profit organization Finanzwende Research in autumn 2023.

Actuary Axel Kleinlein has analyzed the results of this review and comes to the sobering conclusion that the return after deducting the costs of these products is below the long-term inflation target of the European monetary authorities, at less than two percent. Not a single Riester offer was able to achieve a total interest rate of two percent, which means that customers do not make any real profits at the end of their contract.

According to the Finanzwende study, the main problem is the high life expectancy that providers assume of their customers in the payout phase. In addition, there are high costs in the savings phase, which further reduce the possible return. The first payment statistics for the Riester pension, which on average only pays 132 euros per month in old age, also underline the weaknesses of this pension concept.

In view of these developments, Bert Rürup, chief economist at Handelsblatt and namesake of the Rürup pension, warns that taking out a Riester or Rürup pension is voluntary despite state support. Self-selection effects regularly occur, as such contracts are often concluded by people who expect an above-average life expectancy. The results of the study thus illustrate the challenges and risks associated with the Riester and Rürup pensions.