Retirement provision: pensions reduced after conclusion of contract - consumer protection is suing insurers

Retirement provision: pensions reduced after conclusion of contract - consumer protection is suing insurers

According to a report by www.fr.de,

With private pension plans, it often happens that the pensions are reduced long after the contract has been concluded. Insurers are citing declining returns on the capital market. A court finds this doubtful.

The regional court in Cologne has ruled that clauses in Riester contracts that allow insurers to reduce pensions are ineffective. Nevertheless, consumer advocates are filing lawsuits against large insurance companies in order to obtain a decision from the highest court. The consumer advice center filed lawsuits against Allianz, Axa, Zurich Deutscher Herold and LPV Lebensversicherung and is seeking a decision from the Federal Court of Justice. These lawsuits could have far-reaching impacts on the market and consumers.

A possible impact could be that insurance companies will in future be obliged to reverse pension cuts due to poor economic conditions, even if the situation of pensioners improves. This could lead to improved protection for pensioners and increase confidence in private pension provision. The Federal Court's decision could set a precedent and influence the entire industry. In addition, this could lead to Riester contract providers having to provide more transparent information about costs and clauses so that consumers can make well-informed decisions.

The consumer advice center's complaints could therefore help to protect consumers' pensions and improve the conditions for private pension provision. It remains to be seen how the Federal Court of Justice will decide on this matter and what long-term effects this will have on the market.