Riester reformieren oder revolutionieren – Das ist hier die Frage

Abstract

Abstract Considering the aging process in Germany with fewer young people having to finance more elderly, the government coalition aims to make the voluntary but subsidized Riester pension more attractive. This contribution backs the idea of replacing in parts the pay-as-you-go state pension scheme with a funded component and admonishes the urgency of reform. However, two mistakes are pointed out that have been made due to a lack of political courage: Firstly, the contribution guarantee leads to considerable losses in returns and secondly, the voluntary nature of the funded component leads to adverse selection. Since a reform would presumably not induce the desired renaissance, the proposal is to introduce a fully funded mandatory component.