The return on state-sponsored savings contracts is so low over the entire term that they cannot even compensate for inflation by 2 percent. In reality, many customers suffer a loss as a result.
You should only take out a Riester and Rürup pension if you want to live to be at least 100 years old. The vast majority of contracts do not generate a return of two percent over the entire term – and therefore do not even achieve real capital preservation. This is shown by a current study by the consumer association Finanzwende. It was calculated by the actuary Axel Kleinlein, who was head of the Association of Insured Persons for many years.
For the few policies that generate a real return, customers would have to live to be 99 or 100 years old to collect them. “Not a single Riester pension offer achieved a total interest rate of 2 percent” and managed “to ensure that customers do not actually suffer any losses at the end of the contract,” summarizes financial transition expert Britta Langenberg. On the market average, the Riester contracts only produced a total return of 0.8 percent annually. “At least two of the Rürup or basic pension tariffs reached the target” – . Here too, “almost everyone failed at the 2 percent hurdle,” says Langenberg. On average, the Rürup contracts only delivered one percentage point annual return over the entire term.
The numbers are so sobering because the study authors already set modest requirements when calculating returns – namely the hurdle of two percent annually. The European Central Bank (ECB) is also aiming for this rate for inflation in the euro area. “Anyone who invests in long-term pension contracts can expect that they will not only cover the product costs, but also a small inflation compensation of 2 percent,” says Langenberg. “A contract that doesn’t even manage to achieve 2 percent definitely has no customer benefit,” adds actuary Kleinlein.
Typical contracts calculated
The study also took into account the forecast payouts from the insurance companies themselves, which in retrospect often turned out to be too high. The consumer organization relied on the data from the official product information sheets and calculated the return for the typical contract constellation: The customer signs the contract at the age of 37 and pays 100 euros per month until he is 67 years old. Then the payout phase begins. How long this lasts depends on how old the respective Riester or Rürup saver becomes. The study was based on the payout period that the insurance industry expects for its customers.
And here lies the crux of the matter: According to the mortality tables of the industry actuaries (DAV04R 2nd order), insurance customers are around three years older than the average population can expect according to the Federal Statistical Office, says Axel Kleinlein. Insurance companies assume that healthier and longer-lived people tend to take out such retirement plans. The industry calculates accordingly: today’s 37-year-old insurance customers will live to be 89 years old on average, and female customers will be 93 years old. Based on this final age, the study calculated the total return of the contracts.
In this way, the team calculated 111 tariffs available on the market, of which 89 were Rürup/basic pension contracts and 22 were Riester contracts. There were products in all available versions, from classic pension insurance to unit-linked contracts. However, the evaluation did not include support in the form of Riester allowances and tax advantages when making payments. The taxation of pension payments was also left out.
Poor overall performance of all products
This can be criticized in the study design because for some customers it is precisely the allowances that are likely to provide returns – namely for those Riester contracts that only make minimal personal contributions but are significantly increased by high child allowances. “It is true: State funding can significantly improve the personal customer return in certain cases, for example for large children with correspondingly high Riester allowances or for self-employed Rürup savers,” says Langenberg. “This doesn’t change the poor overall performance of the products.” When it comes to the question of whether a pension contract is fundamentally worthwhile for customers, it ultimately comes down to how the saver’s deposit will pay off in the long term. That’s exactly what the study determined, says Langenberg: “We look at the product return, not the personal return.”
The results are particularly informative because the financial transition study not only calculated how high the returns on such contracts are at the end of the savings phase. For the first time, it also included the entire retirement period, the payout phase. “Because the payout should be the standard case for such contracts,” says expert Langenberg.
Insurance lobby insists on compulsory retirement
In the case of Riester and Rürup contracts, the capital must be annuitized, according to the law, otherwise the customers will have to pay back their allowances. “The main problem with these products is retirement,” warns Axel Kleinlein. This is exactly what the insurance industry is insisting on in the current debate about a Riester reform – for which the Finanzwende association itself wants to provide arguments with the study.
The retirement phase therefore has a fatal impact on the overall return on the contracts. Anyone who dies earlier receives less money and receives a negative return. According to the study, on average, after 30 years of savings, at the end of the deposit you get 46,700 euros for the typical Riester contracts examined. This corresponds to an average monthly pension of 121 euros.
With typical Rürup contracts there is a capital of 50,200 euros and a monthly pension of 130 euros. “Significantly better values, sometimes over 200 euros, are only promised in contracts that apparently already take into account future surpluses in the retirement period in the sample information sheet,” warn the authors. However, according to the financial regulator BaFin, it is precisely this inclusion of future surpluses that should not take place. It makes the products look better than those of the competition.
What customers can do for their pension
The model calculations in the product sheets also show what costs the providers expected during the payment phase. “Here we found that the effective costs that could be determined from the model calculations were different than the effective costs mentioned on the product information sheets,” says Kleinlein. The study used the more favorable cost ratio for further calculations. “This shows once again that there is a real problem with the product information sheets as to how such data can be understood. The product information sheets do not enable a real comparison of different offers,” criticizes the mathematician.
, ideally by having 30 percent of the capital paid out as a one-off payment from the contract at the start of retirement. This money is then no longer subject to the insurers’ high safety margins. And for tariffs that provide for a flexible overall pension, it is best to choose a high initial pension – instead of monthly payments that increase more sharply later. This increases the likelihood of getting as much money back as possible from the insurer during your lifetime.
This article appeared firstwhich, like stern, is part of RTL Deutschland.
Source: Stern
