Overview

• The Riester-Rente, introduced in 2002 to supplement Germany's statutory pension system, now faces criticism for delivering lower-than-expected payouts.
• A 2024 Bundesfinanzministerium analysis revealed that average payouts for 2022 amounted to €132 per month, significantly below earlier government forecasts.
• High administrative costs, taxation, and overly optimistic return assumptions are cited as key factors reducing the scheme's effectiveness for savers.
• Withdrawal options and tax rules add complexity, with partial lump-sum withdrawals impacting future monthly payments and triggering immediate tax liabilities.
• Political figures, including Friedrich Merz, have proposed abolishing the scheme as part of broader pension reform discussions ahead of the 2025 elections.