In the case of a Riester pension, may a life insurer unilaterally reduce the pension benefit promised when the contract was concluded? The district court of Cologne must now deal with this question.
A customer from the cathedral city is suing Zurich, one of the largest companies in Germany, because they made just such a cut – by a whopping 25 percent. The Finanzwende citizens’ movement, led by former Greens finance expert Gerhard Schick, supports the lawsuit. She hopes for a fundamental decision. Many insurers have similar clauses, not just Zurich.
In 2006, the then 32-year-old plaintiff from Cologne decided to do something for his pension. He wanted to save around 100 euros a month, preferably with the opportunity to also benefit from positive developments on the capital market. The state allowances are added to his contribution.
“Förder Rentinvest” is the name of the offer Zurich German Herald-life insurance. The amount saved is invested in funds. The costs are comparatively high, but once you retire, your private pension is secure. This will be the case for customer 2039.
After less than half the term, the insurer cuts the private pension by a quarter
For every 10,000 euros saved, Zurich will pay out a Riester pension of 37.34 euros per month, it said when the contract was signed. But in 2017, the Cologne resident experienced an unpleasant surprise: the company said there were only 27.97 euros for every 10,000 euros saved. It lowered the so-called pension factor.
The plaintiff does not want to accept this cut. Added to this is the uncertainty that Zurich will be able to make further cuts until 2039.
The pension factor is the decisive operand for the private supplementary pension. He determines the amount to be paid later. “The rules are actually manageable,” explained Britta Langenberg from Finanzwende. “But if the provider can lower the originally agreed pension factor until retirement, the question arises for customers as to which pension they can rely on.”
Zurich sees itself in the right. According to the Insurance Supervision Act, she is forced to make the calculation with sufficient security. “In the case of unit-linked insurance, the amount of the capital to be paid out is, by its very nature, only known when the pension begins,” said a spokesman. “That’s why so-called pension factors are named here, which quantify the pension per 10,000 euros at maturity.”
After all, the plaintiff would not receive a higher pension if the markets were booming
The security required is obtained either by making discounts on the pension factors from the outset or by reserving the right as an insurer to unilaterally adjust the pension factors if there is an “economic need” for this – such as sharply falling interest rates. An independent trustee must approve the reduction.
Zurich has both forms of contracts in the program, the spokesman continued. After the start of retirement, the pension factor will no longer be reduced. There has been no reduction in the pension factors in the past four years.
In fact, the Cologne plaintiff has such a clause in his contract with Zurich. “If life expectancy increases unexpectedly or the return on investments falls not only temporarily and the long-term ability to meet a lifelong pension payment is therefore no longer ensured, we are entitled to reduce your monthly pension for every EUR 10,000 contract balance as far as this is necessary. to ensure this long-term viability.”
Finanzwende finds this clause unfair, illegal and one-sided. “Because when the capital markets are booming, the insurer does not promise any higher pensions than originally agreed,” criticizes Langenberg.
The consequences of such a regulation for customers are considerable. “You have opted for a pension insurance in order to receive a reliable pension, especially with government-subsidized Riester contracts,” she said. “If the insurer reserves the right to reduce the pension up to the last day before retirement, the predictability is gone.”