The Deutsche Bundesbank has signaled its willingness to take on the management of the new capital annuity scheme. This statement comes from Vice President Sabine Mauderer, according to reporting by the “Tagesspiegel”.
Mauderer highlighted the bank’s three decades of experience managing funds for both the federal government and the various German states. She noted that the Bundesbank currently invests around 140 billion euros in the capital markets on behalf of public clients, and believes that its capabilities allow it to invest even more resources for the state.
The impetus for this move is the government’s intention to introduce a state pension fund modeled after the Swedish system. Mauderer viewed this orientation as a significant milestone, stating that it would allow the retirement system to be applied on a broader scale. She expects that if stocks become a component of both the statutory and private pension provisions, retirees will receive a larger portion of their benefits, offering many people a real chance to live their later years as they desire.
Although the Bundesbank had previously remained reserved in this debate, the institution in Frankfurt possesses extensive experience in asset management. It currently manages pension assets for several federal states, the Federal Employment Agency, and social insurance providers, in addition to handling the pension reserves for civil servants. This wealth is housed in dedicated accounts and is administered by the Bundesbank’s own portfolio managers.
Mauderer quantified the current managed volume at 140 billion euros-a figure many times higher than the approximately 26.5 billion euros currently managed by Kenfo.
Regarding investment strategy, the risk profile and resulting yield are aligned with the instructions of the client. Crucially, the Bundesbank differs from Kenfo in its investment scope; it exclusively focuses on liquid assets-investments that can be sold quickly at any time-and does not invest in real estate, infrastructure, or private equity. “We invest depending on the specific needs of our clients, whether they are stocks, government bonds, or corporate bonds,” Mauderer explained. For the annuity scheme specifically, the focus must be achieving a solid return with adequate risk, although she did not specify a target range.
Regardless of which entity ultimately leads the implementation of the capital annuity, the decision to move towards such a system is considered correct. In her view, the introduction of a capital-backed retirement system will foster greater interest in the stock market among the German public, and this opportunity should be seized by the country.
