Final Report of the Focus Group on Private Pensions

Professor Tabea Bucher-Koenen, head of ZEW’s “Pensions and Sustainable Financial Markets” Research Unit, is an expert in the Focus Group on Private Pensions. Today, the committee, appointed by the German Federal Ministry of Finance (BMF), has published its final report. The Focus Group recommends several measures to make private retirement provision more attractive, including the introduction of a subsidised retirement savings account, flexibility during the payout phase, targeted allowances, and a comparison platform with product information for both the savings and payout phases.

“With the publication of the final report, the Focus Group on Private Pensions presents feasible solutions for a more appealing private old-age provision. The aim is to develop a simple, transparent, efficient and cost-effective proposal that enables people to save for retirement better than before,” explains Tabea Bucher-Koenen, who, in addition to her work at ZEW, is also a professor of financial markets at the University of Mannheim and co-director of the Mannheim Institute for Financial Education (MIFE). “Private pensions have become less attractive in recent years, and the current crises have exacerbated the situation. Since the beginning of the COVID-19 pandemic, people with low incomes in particular have been less able to make provisions for old age or have even had to fall back on existing assets to cover current expenses. We were able to demonstrate this in a ZEW expert brief, which examined how the COVID-19 crisis and price increases have affected old-age provision. Therefore, viable solutions and new incentives are needed that encourage people to make provisions in the long term and offer support in their decisions. In addition to attractive products, investments in financial education and independent advisory and information services are also needed.”