Digital Finance & Tokenization▲impact 4
Germany's pension overhaul could double private assets to €500 billion
Germany's private pension assets could double to about €500 billion ($577 billion) over the next decade as a major reform directs more retirement savings into capital markets, Bloomberg reported on Saturday. Asset managers including Deutsche Bank's DWS Group, JPMorgan Asset Management and Vanguard are preparing products for January 1, 2027, when the new system takes effect. The reform will replace Germany's Riester pension system, which has traditionally prioritised capital guarantees and conservative insurance products, with subsidised brokerage accounts holding investments such as index-tracking funds and private credit. The standard account will cap fees at 1%, which is expected to favour low-cost exchange-traded funds, while investors can pay more for products including European long-term investment funds that provide retail access to private equity, private credit and infrastructure. S&P Global Ratings estimates the changes could generate €26 billion to €56 billion in additional annual inflows into German private pensions following an onboarding period of up to two years, and consultancies Sirius Campus and Aeiforia estimate that more than a quarter of the roughly €225 billion held in existing Riester products could migrate to the new system.