A comparison between the Riester pension and retirement savings accounts shows clear advantages for the new system.
Financial support
While the Riester pension offered a flat-rate basic allowance of €175 per year, the AVD offers up to €540 per year through a tiered system.
Investment opportunities
The Riester pension scheme did not allow direct ETF investments. The AVD, on the other hand, enables a full equity allocation through low-cost ETFs.
Capital guarantee
The Riester pension required a 100% contribution guarantee, which reduced returns. The AVD makes the guarantee optional.
Cost
Riester products often cost 2% per annum or more. The AVD standard account is capped at 1% per annum.
Conclusion
For long-term savers, the AVD is clearly more advantageous. Existing Riester contracts can be transferred from 2027 onwards.