Kann Die Riester-Rente Die Rentenlücke in Der Gesetzlichen Rente Schließen?

Börsch‐Supan, Axel; Gasche, Martin

doi:10.2139/ssrn.1641100

“…3 2 For more information see, e.g., v. Gaudecker and Weber (2006), Coppola and Reil-Held (2009), Coppola and Gasche (2011), Börsch-Supan and Gasche (2010a), Pfarr and Schneider (2011).…”

Section: Introductionmentioning

confidence: 99%

Subjective Life Expectancy and Private Pensions

Bucher‒Koenen

¹

,

Kluth

²

2012

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractOne important parameter in the decision process when buying a private annuity is individuals' subjective life expectancy, because it directly influences the expected rate of return. We examine the market for private annuities in Germany and evaluate potential selection effects based on subjective life expectancy. First individuals are pessimistic about their life span compared to the official life tables.Second we find a significant selection effect based on subjective life expectancy for women invested in private annuity contracts-so-called Riester pensions. For men there seems to be no difference in subjective life expectancy by Riester ownership.Comparing the size of this selection effect with the underlying mark ups in life expectancy that are charged by the insurance industry shows that the latter appears to be in line for women but too high for men. Our findings have strong policy implications. On the one hand miss-perceptions about longevity risk might prevent individuals from providing sufficiently for retirement, on the other hand mandated unisex tariffs appear to prevent men from investing in Riester pensions.

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“…For certified Riester products subsidies exist in the form of a basic benefit matching the own contribution and a tax deduction, depending on the amount contributed to the contract and the marginal tax rate of the owner of the contract. Low income individuals receive a relatively high subsidy due to the matching basic benefit, higher income individuals profit from the tax deductions (Börsch-Supan and Gasche, 2010). While subsidies are particularly generous for low income individuals 4 , targeting individuals with high risk of old age poverty, there is widespread misperception of the generosity of the state-subsidy in this group (Coppola and Gasche, 2011).…”

Section: Related Literature and Hypotheses 21 Riester Pensions: Thementioning

confidence: 99%

Family Background, Informal Networks and the Decision to Provide for Old Age: A Siblings Approach

Lamla

¹

2012

SSRN Journal

3

0

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractIn order to encourage people to take out voluntary private pensions to supplement decreasing statutory provisions Germany introduced the so-called Riester pensions. The complex design of the new product might have created entry barriers into the market helping to explain the slow adaption path in the eligible population until today. Existing empirical evidence has not properly taken into account the search and decision costs related to Riester pensions. I use information on family background in order to account for the predisposed ability to manage relevant information as well as to capture the impact of information sharing within families. I conclude that parental erudition as well as experience in financial matters are determinants of their children's preferences and ability in financial decision making, however, omission does not seem to lead to misleading results on other coefficients. Contemporaneous as well as sequential correlations in Riester ownership between siblings are pronounced. While the former might be due to shared preferences, I take the latter as evidence for information sharing. Positive externalities help to overcome entry barriers in the Riester market by dispersing information. The family as a source of information becomes less important with time as the number of Riester owners in other social circles grows. Once a critical mass has been reached positive spillovers create a social multiplier which should result in dynamic demand for Riester contracts. Indeed official statistics exhibit increasing uptake rates among low income individuals for whom initial entry barriers were comparably high. JEL classification: D83, D91Acknowledgment: I thank Michela Coppola who has given me advice throughout the project. Moreover, I am grateful to Axel Börsch-Supan, Joachim Winter and Michael Ziegelmeyer for their helpful comments. I have benefited from comments coming from participants at the MEA seminar (Munich),

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“…The Riester pension is one prominent example, introduced by the German government to strengthen the third pillar of the pension system. The growing importance of Riester contracts to fill the gap of a declining public pension level in 2030 by 14.4%, compared to a situation without reforms in 2001and 2004(Börsch-Supan and Gasche, 2010, underlines the need to better understand consumer behavior within the market for Riester contracts as analyzed in this study. Our findings have important implications for policymakers not only in Germany but also in other industrialized countries introducing voluntary private pension schemes like the 2003 tax-favored private scheme in Austria (Zukunftsvorsorge), the 2003 voluntary individual pension scheme (PERP) in France, or reforms in Czech Republic, Slovenia, Ireland and Finland (European Commission and the Economic Policy Committee, 2009).…”

Section: Introductionmentioning

confidence: 99%

Backing out of private pension provision: lessons from Germany

Ziegelmeyer

¹

,

Nick²

2013

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Financing pensions in the EU is a challenge. Many EU countries introduced private pension schemes to compensate declining public pension levels due to reforms made necessary by demographic change. In 2001, Germany introduced the Riester pension. Ten years after introduction the prevalence rate of this voluntary private pension scheme approximates 37%. However, numerous criticisms raise doubts that the market for Riester products is transparent. Using the 2010 German SAVE survey, this paper investigates for the first time terminated and dormant Riester contracts on a household level. Respectively 14.5% and 12.5% of households who own or have owned a Riester contract terminated it or stopped paying contributions. We find that around 45% of terminated or dormant Riester contracts are caused at least partly by product-related reasons, which is significantly higher than for endowment life insurance contracts. Uptake of a new contract after a termination is more likely if termination is productrelated. Nevertheless, after a termination 73% of households do not sign a new contract, which can have serious long-term consequences for old-age income. Households with low income, low financial wealth or low pension literacy are more likely to have terminated or dormant contracts. Low income and low financial wealth households also have the lowest prevalence rate of Riester contracts and are at higher risk of old-age poverty.

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Kann Die Riester-Rente Die Rentenlücke in Der Gesetzlichen Rente Schließen?

Abstract: Zusammenfassung Mit der

Cited by 11 publications

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Subjective Life Expectancy and Private Pensions

Subjective Life Expectancy and Private Pensions

Family Background, Informal Networks and the Decision to Provide for Old Age: A Siblings Approach

Backing out of private pension provision: lessons from Germany

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