New private pension provision: This is how the new private pension provision works

New government funding for old-age provision will start in 2027. For whom it is worthwhile, what needs to be taken into account and what will become of the old Riester contracts.

March 27, 2026, 10:37 am

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Article summary

The reform of private pension provision brings innovations: simpler and cheaper state-funded models should be available from 2027. The new products offer more transparency and flexibility, with various pension options such as guaranteed contracts and retirement savings accounts without a guarantee. The state allowances depend on your own contributions, with higher payments leading to higher subsidies. If desired, old Riester contracts can be transferred to the new private pension plan, although it is advisable to carefully examine the costs and returns. It’s worth getting independent advice and combining different sources to find the best solution for your individual needs.

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The reform of private pension provision is intended to solve an old problem: many Riester contracts were expensive, complicated and low-yield. Now the Union and the SPD are creating a new, state-funded model that is supposed to be simpler, cheaper and bring more income. What you should consider now if you want to use the new products and if you have an old Riester or Rürup contract – or are taking precautions with ETFs.