(31 August 2026 – Germany) Germany’s biggest pension reform in over two decades, replacing the Riester system with accounts modelled loosely on US 401(k) plans, is set to redirect hundreds of billions of euros in retirement savings toward global asset managers, at the expense of insurers.
As reported in the FT, the new Altersvorsorgedepot accounts, taking effect in January, will cap fees at 1 percent compared with up to 4 percent under the current Riester structure, making low-cost passive products the likely primary beneficiaries.
The biggest inflows will ultimately go to the large ETF providers with Morgan Stanley estimating the reforms could generate €40bn in annual capital market flows, while Vanguard projects the accounts could draw €150bn within five years. Competition will be fierce, with incumbent German distributors, digital brokers such as Trade Republic and Scalable Capital, and foreign entrants including JPMorgan Asset Management and Revolut all vying for flows.
The reforms dismantle two of Riester’s most defining, and criticised, features: the capital guarantee that pushed providers into low-yielding assets, and the mandatory conversion of savings into a lifetime annuity. Insurers, who currently hold two-thirds of Riester accounts, have warned that greater flexibility exposes savers to longevity and market risk. Implementation concerns also remain, with some providers cautioned they may not be ready by January given the complexity of building subsidy administration and government data exchange systems.