In many Riester contracts there is a clause that “if necessary” additional costs may arise after the savings phase. According to the Federal Court of Justice, such unclear clauses are not permitted.
It’s no small matter: According to the Baden-Württemberg consumer advice center, financial institutions have already charged fees of 750 euros for Riester contracts – because of the administrative costs of a so-called life annuity.
Until now, it wasn’t enough for Riester customers to pay in for years: at the end of the savings phase, they could decide whether the money would be paid out in one go or as a pension. But then they should cover the costs incurred when concluding a new pension contract, such as checking the contract or the broker’s commissions.
According to the BGH, clauses are too unclear
In many contracts, these costs may no longer be required from now on. The Federal Court of Justice (BGH), Germany’s highest civil court, has overturned the previous contractual clauses under which such extra costs had to be paid. The clauses are too unclear.
At Sparkasse Günzburg-Krumbach, for example, it was stated that “if necessary” closing or brokerage costs can be charged. This means that consumers cannot predict whether and what they will have to pay later, the court said. It is also unclear whether these costs have to be paid only once, once a month or once a year.
“Pleasing verdict for hundreds of thousands”
The BGH judges are very clear in their criticism: The Sparkasse could have quantified in advance how much would be incurred in total.
The representative of the Baden-Württemberg consumer advice center, Nils Neuhauser, is pleased about this court decision. “The verdict is a positive ruling for hundreds of thousands of consumers who have taken out Riester bank savings plans,” says Neuhauser. “Both those who did this at savings banks and those who did it at Volks- und Raiffeisenbanken.”
Mainly old contracts affected
This mainly concerns older contracts, as many financial institutions have now withdrawn from the business. In new sales there are only a handful of providers who do not have such clauses. “This means that today they are no longer used in the store; it is mainly about 700,000 to 800,000 existing Riester customers,” specifies Neuhauser.
After today’s decision, consumers should pay attention if they are charged fees again after the savings phase.
It’s worth taking a look at the small print
“The judgment is relevant when it goes from the savings phase to the payout phase,” the consumer advocate continued. “This means that all savers who are still saving now and will only retire in five or ten years should keep in mind that when the pension payout phase comes later, the savings bank or the Volksbank may not charge any fees, provided that was not specifically stated in the contract.”
So it’s worth taking another look at the small print of the original contract: If it is announced that costs may arise after the savings phase, this is clearly too unclear – and therefore not a basis for extra fees.