2024-10-01 13:29:08
Politics
Finance
Economy

Consumer Advocates Criticize Lindner's Retirement Savings Plans

Image courtesy of : AFP (TOBIAS SCHWARZ)

Germany's Federal Minister of Finance, Christian Lindner, is facing criticism from the Verbraucherzentrale Bundesverband (vzbv) over his proposed reforms to private retirement savings. The vzbv argues that the draft legislation, circulated to other ministries on Monday, falls significantly short of consumer expectations. Dorothea Mohn, head of financial markets at vzbv, stated that the new plans fail to address how to make retirement savings cost-effective. She emphasized that high costs in current contracts hinder good returns, ultimately affecting pension outcomes.

The cornerstone of Lindner's reform is the introduction of retirement savings accounts, aimed at enabling more yield-oriented investments compared to the existing Riester pension products. These accounts are designed to facilitate investments in the stock market, but they do not offer full capital guarantees.

Despite the criticism, vzbv welcomed the option for consumers to receive their Riester funds as monthly payouts, in addition to a lifelong pension. Mohn highlighted that private retirement savings is a pressing issue for consumers who seek viable solutions from the government.

While Lindner's plans include state-funded retirement savings accounts with allowances and special deductions up to 3,000 euros per year, they lack guarantees on the capital invested. The proposal also includes generous bonuses for low-income earners, beginners, and families. However, there is still debate within the coalition government regarding the overall retirement package.

Consumer advocates have also expressed concerns about the lack of advisory services and the exclusion of individual stock investments. They argue that the proposed plans are too risky and call for stronger support for the statutory pension system instead. The future of Lindner's proposal remains uncertain as it faces opposition from various social groups and political parties.

AFP
1. Oktober 2024 um 11:24

Consumer Advocates Criticize Lindner's Plans for Retirement Savings Accounts

Finance
Politics
Economy
Federal Finance Minister Lindner is planning retirement savings accounts with stock market investments without a safety guarantee. The Federal Association of Consumer Centres, led by Financial Market Director Dorothea Mohn, criticizes that the plans entail excessive costs and insufficient returns in private retirement savings but welcomes the monthly payout of the Riester funds.
rp_online
1. Oktober 2024 um 10:21

Questions and Answers about the "Lindner Depot": How the State Wants to Promote Private Retirement Provision in the Future

Whether Lindner's plans will be implemented before the 2025 federal election is open. The SPD and Greens want to fix the pension level until 2039 and block the plans. Social associations, trade unions and consumer advocates criticize the "Lindner Depot" as too risky and instead demand a strengthening of the statutory pension.
DER SPIEGEL
1. Oktober 2024 um 08:47

Christian Lindner wants to make private retirement provision more attractive with new portfolios - DER SPIEGEL

Finance
Economy
Politics
The government is planning a reform of private retirement provision with new retirement portfolios that are more focused on returns and receive state subsidies. There will be no complete capital guarantee for the paid-in capital, but products with partial guarantees. The subsidies are to be increased for low-income earners and young professionals.
CW

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