Make up for the wearing out of statutory retirement. Ten years ago, the red-green Gerhard Schröder administration caused a sensation by introducing a funded supplementary pension scheme in the middle of the German pay-as-you-go scheme. Named “Riester pension” after the then Minister of Labor Walter Riester, it officially aimed to make up for the lost profit from the gradually decreasing statutory old-age insurances benefits. It gives direct subsidies, called bonuses, or tax deductions. To get full State assistance, policyholders have to pay at least 4 percent of their annual gross income to a registered pension saving scheme. They will then get €154 a year along with another annual bonus amounting to €185 per child. They can also decide to deduct these retirement savings from their taxable income, up to €2,100 a year.
pay-as-you-go scheme. Named “Riester pension” after the then Minister of Labor Walter Riester, it officially aimed to make up for the lost profit from the gradually decreasing statutory old-age insurances benefits. It gives direct subsidies, called bonuses, or tax deductions. To get full State assistance, policyholders have to pay at least 4 percent of their annual gross income to a registered pension saving scheme.
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