Retirement provision portfolio as a Riester successor: Why life insurers could lose out

The reform of the Riester pension will only come into force at the turn of the year. But the successor “retirement provision portfolio” is already on everyone’s lips. The major fund companies and the first neobrokers have announced the details of their new offers. However, the life insurers who currently manage most of the Riester pensions have been surprisingly quiet.

Life insurance could be the big loser in the coming years. All previous announcements for the new portfolio are based on ETFs and funds with a retirement payout plan in which a certain amount is distributed every month until the capital is used up. The lifelong annuity plays no role, and guarantees are virtually non-existent. These two elements of classic life insurance are not in demand in the post-Riester world. This reinforces a trend that began several years ago. The many young savers rely on stock ETFs from cheap internet banks, but they don't buy life insurance.

For a long time, policies were the most popular form of retirement provision. Statistically, every resident had completed more than one. But that was many years ago. First, tax advantages were reduced, then the low interest rate phase and the promise of guarantees combined with high costs reduced the return.

It's good that other forms of savings are more popular today. Longevity risk can be covered more cheaply than with a life insurance annuity. Namely with the payout plan of a fund, if only the end is chosen late enough. So not at 85, but rather at 90 or 95. The payouts would still be higher than with life insurance. And the much cheaper term life insurance ensures that your relatives are protected.