Website union election program reveals disparities between fact and misconception
In a recent development, the CDU and CSU have proposed replacing the Riester pension with a mandatory social security standard product for all employees. This move, aimed at increasing coverage and transparency, has sparked debate among financial experts, with one prominent voice being Martin Klein, the managing director of the industry association Votum Verband Unabhaengiger Finanzdienstleistungs-Unternehmen in Europa.
The standard product is intended for 45 million workers with diverse employment biographies, wishes, and goals. However, employers and authorities will be unable to provide advice on the standard product, leaving it unclear who will help employees decide on the right guarantee level for the standard product.
Martin Klein, a lawyer by profession, is sceptical about the one-size-fits-all solution for private old-age provision, likening it to other political challenges. He suggests that financial security in old age is not possible without professional advice.
The author's association represents 100,000 independent insurance and financial advisors, collectively advising more than 11 million consumers on matters related to old-age security, wealth formation, and individual insurance protection.
The CDU and CSU indicate that they want to replace the Riester pension system with a prescribed standard product for all employees without setup costs. This move is aimed at providing more transparency through standardized offers, and achieving effectively higher returns by lowering costs and using more profitable investment forms. The proposal also aims to avoid the errors of Riester, such as high fees and low yields, which have led to a decline in contracts and low participation by the targeted low-income groups.
However, it is unclear how these sustainability goals will be determined in the standard product, and who will determine the additional security needs of the employee for the standard product. The Union suggests offering products with different guarantees for the standard product, but it remains unclear how this will be implemented.
The advisory on additional employee security needs and suitable guarantee levels is provided by a standard product mechanism that automatically selects a default plan if parents of newborns do not decide within six months, promoting simplicity and transparency without complicated individual decisions.
Under this proposal, employees may no longer have the choice to save for an insurance product, investment fund, or for private home ownership. This has led to opposition from Martin Klein and other financial experts, who argue that a mandatory standard product for private old-age provision is considered an illusion.
The debate continues as policymakers and financial experts grapple with the implications of this proposal. As the discussion unfolds, it is clear that finding a balanced solution that caters to the diverse needs of workers while ensuring financial security in old age will be a challenging task.
Read also:
- United States tariffs pose a threat to India, necessitating the recruitment of adept negotiators or strategists, similar to those who had influenced Trump's decisions.
- Weekly happenings in the German Federal Parliament (Bundestag)
- Southwest region's most popular posts, accompanied by an inquiry:
- Discussion between Putin and Trump in Alaska could potentially overshadow Ukraine's concerns
