Pension factor scandal: This is how insured people lose up to 124 euros per month!

Pension factor scandal: This is how insured people lose up to 124 euros per month!

More and more Germans are relying on private pension products such as Riester, company or Rürup pensions in order to be financially secure in old age. But the reality is bleak: Insurers have drastically reduced the pension factor of their policies in recent years. This has a direct impact on the amount of monthly payments in retirement. A concrete example shows that the pension factor of a Riester contract was 51.43 when the contract was signed and has since been reduced three times to 33.70. This could mean a difference of up to 124 euros less in monthly pension for those affected.

Advice portals such as Finanztipp reported in 2017 that around 100,000 Axa insurance customers and 700,000 Allianz contracts were affected. A central problem are clauses in the small print of the contracts that allow reductions in the pension factor. A significant ruling by the Stuttgart Higher Regional Court has made it clear that contracts with the possibility of reduction must also include an option to increase the pension in better times. The Baden-Württemberg consumer advice center has therefore sued against the Allianz clause, which allows cuts in the event of economic difficulties.

Legal developments

The legal situation surrounding the cuts to the Riester pension is currently extremely dynamic. Two important judgments from 2023 and another from 2024 could have serious effects on all insured persons. In February 2023, the Cologne Regional Court ruled in favor of the insured and declared that a subsequent reduction in the pension factor by insurers such as Zurich Deutscher Herold Lebensversicherung is inadmissible, especially if this is justified by the low interest rate phase. Insurers therefore do not have the authority to unilaterally reduce pension payments. This gives the insured the opportunity to claim their original pension payments.

In 2024, another significant ruling by the Reinbek District Court followed, which declared a clause used by Allianz Lebensversicherung to reduce the pension factor to be ineffective. Future cuts are therefore no longer permitted. However, the ruling of the Stuttgart Regional Court from July 2023, which assessed Allianz's pension factor reduction as legal, causes uncertainty. It remains to be seen how the appeal will be decided.

Effects and options for action for insured persons

The different rulings create a complex legal situation for the insurance industry and the insured. While the Cologne ruling strengthens the rights of the insured, the Stuttgart ruling (which is still under appeal) raises questions and could lead to further uncertainty. It is therefore absolutely recommended that affected insured persons check their contracts carefully and seek legal advice.

A crucial parameter for the payment of the Riester pension is the pension factor. Any reduction in this factor not only leads to a loss in monthly payments, but also affects financial security in old age. Insured persons should therefore actively engage with their contracts and, if necessary, use the sample letters from consumer advice centers to communicate with their insurers in order to take action against unlawful cuts, as has already been reported.

Overall, current developments show that insured people should not give up hope despite the uncertain legal situation. The rulings offer opportunities to fight back against unlawful cuts and strengthen the rights of consumers.