Walter Riester: save more for retirement

Two verbs were recently added to the German dictionary. One denotes a popular search engine. The other refers to a former German minister: Walter Riester. Germans who “riester” save up for retirement – much like in Switzerland’s pillar 3a. Today, over 16 million Germans have a Riester plan. Given the enormous tax benefits and government grants available, it’s surprising that there aren’t more people with a Riester plan, according to presenter Christine Maier, who expressed her astonishment at another instalment of TheTalk@TheStudio. Yet the number seemed quite satisfactory to Walter Riester, her guest and the mastermind of this pension scheme as the Minister of Labour and Social Affairs under Chancellor Gerhard Schröder. After all, he noted, the plan is closed to many people, including the self-employed.

Life expectancy of pensioners doubled

Still, Riester did point out areas for improvement at the event co-hosted by Ringier and Helvetia. “We don’t set aside enough for retirement given current demographics and rising life expectancies”, Riester said. And while he admires Switzerland’s OASI solution and three pension pillars, he believes that it, too, needs to make changes. “When I started working, people weren’t expected to be alive ten years after retirement. Now, the average person spends over 20 years in retirement”, the 73-year-old added.

Pro 2020 Pension Reform

“Indeed”, noted Philipp Gmür, CEO of Helvetia, “if we want to protect our pensions in future, we will have to build up reserves, work longer and get by on somewhat smaller pensions.” That was why Helvetia was in favour of the 2020 Pension Reform, which comes up for a vote on 24 September 2017. All three of these measures are included in the reform. In Gmür’s eyes, this is the only way for voters to support such a reform. However, the jury is still out, as an impromptu survey of the audience showed: barely half of the respondents knew how they were going to vote.

Merkel gets another turn

However, the jury is not out on the upcoming election in Germany – at least not in Riester’s assessment. For the long-serving SPD politician, current chancellor Angela Merkel is the clear favourite for re-election. Martin Schulz, her opponent, focuses too much on Europe, he believes. There are plenty of topics worth debating, but Riester hadn’t seen a true campaign discussion on key issues such as security. Dieselgate is not really an issue for him: “The automotive industry could have resolved this issue jointly and proactively a long time ago”, according to this long-standing member of VW's supervisory board.