Bundesfinanzminister Lars Klingbeil (SPD) said just before the Bundestag hearing that he is open to changes to the draft law reforming private pension savings. “We want to set a clear cost limit” he told “Welt am Sonntag”, adding that for the standard product a cost cap already exists and that the exact placement of that cap will be the subject of productive debate in parliament.
He also stressed the need for greater choice and transparency. “Strengthening competition will ultimately lower costs. In that way, private pension will become a better complement to the statutory pension for everyone, regardless of income level” he explained. The parliamentary hearing is scheduled for Monday.
The draft law, developed at the Federal Ministry of Finance, presently contains a cost ceiling of 1.5 percent for the proposed standard product, a figure that has been contested by consumer‑protection groups and by the Bundesrat, which must also approve the legislation. In a statement the Bundesrat warned that “a ceiling set this high runs contrary to the goal of a transparent, consumer‑friendly and particularly attractive standard product”. The standard product is intended to be obtainable with just a few clicks on a web portal.
The overarching aim of the reform is to reposition private pension savings. Under the draft, savers will be able to invest in a broad range of managed funds, ETFs and state bonds. The state will subsidise the first €1,200 with €0.30 for every euro invested, and an additional €0.20 for each euro invested up to €600 (to be paid annually).
