Stuttgart Life ceases Riester product sales.
In a series of recent developments, two major insurance providers, DWS and Stuttgarter Lebensversicherung, have announced that they will cease offering new Riester pension contracts. These changes, effective in July and August respectively, have raised concerns among investors and pension holders.
Firstly, DWS will no longer offer new Riester contracts as of July 1, 2021. Similarly, Stuttgarter Lebensversicherung will stop accepting new applications for Riester pension from August. Applications completed by August 1 will, however, be underwritten with a grace period ending on September 15.
The reasons behind these decisions are not explicitly stated, but it is clear that the current interest rate environment and the 100% guarantee requirement for Riester pension play significant roles. This guarantee requirement, which ensures a minimum return, is seen as a factor that makes the product less attractive in a low-interest-rate scenario.
The problem particularly affects contracts with a shorter term, as stated by Union Investment. In response, Union Investment restricted its Riester offer at the end of April by introducing a minimum term of 20 years for new contracts. This requirement forces providers into heavily security-oriented investments with currently low yields, restricting the scope for capital investment and good returns.
It's worth noting that these changes will affect the comparison of certain Riester-Rente index-safe and performance+ tariffs in some programs. Both the calculation of the index-safe tariff and the performance+ tariff will be omitted from comparison programs.
However, it's important to clarify that these changes do not affect existing Riester pension contracts. The latest insurance start date for these applications is January 1, 2022.
As for alternative options for Riester pension contracts, no information has been provided as of yet. The insurance company that will stop selling new Riester pension insurance contracts from September 2025 is not explicitly named. It's known that many providers have withdrawn from the Riester business over time due to low returns and high costs, but no single insurer specifically announced as stopping sales from September 2025 has been found in the available sources.
Lastly, it's unclear what impact these changes will have on existing Riester pension contracts. As the situation develops, it's advisable for investors and pension holders to stay informed and seek professional advice when necessary.
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