Berlin, March 27, 2026 — Germany’s lower house of parliament has voted to replace the long-criticized Riester private pension system with a new state-backed savings model intended to be simpler, cheaper and more attractive for savers, especially low-income workers and families.
The Riester scheme, introduced in 2002, has been widely seen as underperforming: complex, costly, and delivering limited benefits for many contributors. Lawmakers said the overhaul will phase out new Riester contracts and establish a revamped third pillar of retirement provision alongside statutory and occupational pensions.
Key elements of the reform include:
– Simplified and increased state subsidies, with a special focus on making saving beneficial “from the first euro.”
– Expanded eligibility to include self-employed workers.
– Streamlined rules designed to cut costs and reduce administrative complexity.
– Plans for a “starter pension” in which the state would contribute about €10 per month into accounts for children and young people, details to be presented by the finance ministry soon.
Finance Minister Lars Klingbeil hailed the package as a “real milestone” and a “game changer” that strengthens private retirement provision and broadens access to effective sav ings.
The governing SPD–CDU/CSU coalition approved the reforms. The Left Party opposed the measure, while the Greens and the far-right AfD abstained.
Political context and other developments
The vote comes as the center-left Social Democrats (SPD) face a series of electoral setbacks. Party leaders convened a crisis meeting following recent losses in state and local votes; the leadership said it would not resign but must press for reforms within the coalition to halt the party’s decline ahead of further regional contests this year.
Other news from Germany on March 27, 2026:
– Former Red Army Faction member Daniela Klette, 67, has been charged by federal prosecutors with serious crimes tied to attacks in the early 1990s, including attempted murder, involvement in explosive attacks, kidnapping for extortion and aggravated robbery. A Frankfurt court will decide whether and when to begin trial proceedings. Klette is already on trial in a separate case covering robberies alleged to have financed a life in hiding; she was arrested in Berlin in February 2024.
– State-owned rail operator Deutsche Bahn reported a €2.3 billion net loss after writing down the value of its long-distance unit amid persistent infrastructure and punctuality problems. The company cited a €1.4 billion reduction in expected value for its DB Fernverkehr unit and said the sale of DB Schenker removed a profit source even as it helped cut debt. CEO Evelyn Palla said a turnaround is beginning but warned it could take at least a decade to restore the rail network fully.
– A humpback whale that had been stranded on a sandbank off Germany’s Baltic coast near Timmendorfer Strand was freed after several days of rescue attempts and swam back to sea.
These developments underline a moment of policy change and political challenge in Germany as lawmakers move to address long-standing issues in retirement provision while parties grapple with electoral pressures.