Table of Contents
Can you change the Riester provider so easily?
Before we go into the 5 reasons for a Riester change, we first have to clarify the question of whether you can change the provider so easily at all. And yes, the whole thing is usually easily possible.
If you switch to another provider, the existing contract will be terminated and a new contract will be concluded. The savings so far Credit is transferred without damaging the premium. So you don’t lose any credit and the Government allowances do not have to be repaid either.
Costs when changing the Riester pension
However, there are two downsides to switching Riester pension:
- exchange fee in the amount of 50 to 150 euros, which the old provider demands. However, there are also providers who accept this fee under certain conditions.
- closing costs, which will be added to the new contract. But if you currently have a bad Riester contract, that’s not so bad, because despite new acquisition costs, the new contract will perform better in the long run.
5 reasons for a Riester change
Too high costs in your Riester contract
If your Riester pension too high (administrative) costs causes, then this is an absolutely justified reason to change your Riester pension. If too many costs are incurred (e.g. ongoing fees), then your Riester contract simply cannot generate any returns. At the end of the day, you may have the maximum contributions and allowances that are available to you when you retire. But only because, according to the law, they must at least be available to you. Of course, ideally, your Riester pension should generate some additional returns for you. And that’s not possible if the costs for the contract are too high.
Many contracts are simply expensive
High costs, and on the other hand hardly any value you get for it. But there are also tariffs on the market that supposedly have slightly higher costs, but which in return also offer significantly better performance and better value.
A company with an extremely good investment model and very good pension factors cannot reproduce this “cheaply”. So you need one ideal combination of price and performance.
In everyday life, you don’t always buy the cheapest. But you also pay attention to the quality. And especially with a Riester pension with such a long term, quality should be one of the most important criteria
Your Riester contract does not generate any returns
In addition to high costs is of course also a too low return a reason to change your Riester pension. Unfortunately, low costs don’t help you either, if the bottom line is that you don’t generate a return, your Riester contract will. Unfortunately, most Riester contracts are not “return-optimized”. This means that in many cases only a very small part of your contribution is actually invested in the stock market. Because only there are real opportunities for returns.
Change Riester pension because simply no return is possible
However, the rule is that your contribution is invested “safely” (with a current guaranteed interest rate of 0.25%). It is simply impossible that your Riester contract can even begin to generate any form of return. Depending on the investment model (these vary greatly depending on the insurer), some Riester providers can Invest a relatively high proportion of your contribution in free funds. These providers are recommended when it comes to maximum returns.
You do not have a 100% guaranteed pension factor
Unfortunately, this point is very often neglected, but it is so immensely important. If your Riester pension is not really guaranteed pension factor then your Riester pension is nothing more than a lottery game. Because only a guaranteed pension factor determines how much monthly pension is actually available to you later.
In addition, the pension factor is often only guaranteed for the contributions paid in, but not for the entire contract balance (including generated fund assets).
Important NOTE: If you have a Riester bank savings plan (e.g. DWS or Union Investment), then there is no pension factor. Pension factors are only possible via an insurer. And that’s why you should definitely optimize such a Riester bank savings plan and switch to a provider that already offers you a high, guaranteed pension factor.
Your Riester contract includes a trustee clause
Another point that very few people know. Is in your Riester pension a so-called trustee clause agreed, then your Riester pension provider can still adjust and lower a supposedly guaranteed pension factor. An external trustee is simply appointed, through whom this is then possible. Unfortunately, this passage is not simply called “trustee clause” in your contract, but is usually hidden somewhere in the AVB and heavily scribbled. Especially here we recommend the free & non-binding Riester checkas this is really very difficult to find out as a layman.
Contract with a guaranteed low interest rate
Some Riester contracts (especially older ones) only have a guaranteed interest rate, but do not invest in shares and funds. At the same time, such contracts usually cause high costs. So a contract with, for example, a guaranteed interest rate of 2.25% and an expense ratio of 2% cannot even beat inflation. Such contracts should also be optimized if possible.
Important NOTE: There is also no annuity factor for contracts with pure guaranteed interest. Here, your pension is only calculated with the guaranteed interest rate, since there is no fund balance.
Procedure when changing the Riester pension
- Existing Riester contract analyze and offers to compare. If the existing contract is good, everything stays as it is. If not, go to step 2.
- New Riester contract to lock and indicate to the new provider that it is a change acts.
- After accepting the application make a change. As a rule, the new provider takes over the communication with the old provider (termination, transfer of contract credit, etc.). If not, you have to cancel the old contract yourself (observe the notice period).
It’s easiest for you if you use our free & non-binding Riester check uses. In addition to the analysis, we support you in all further steps.
Conclusion “Change Riester pension”
The probability that your Riester pension is not optimal is relatively high. But as long as you have one long term until retirement (at least 15 years), all hope is not lost and you can switch your Riester pension to a new, better provider and also transfer your previously saved capital there.
The alternative to changing the Riester pension is the exemption from contributions. Then you don’t pay any more contributions, but you keep the allowances you’ve received so far. At a You have to pay back the allowances and also the tax advantageswhich is why this is usually the worst option.