German Pension Reform Aims to Double Private Assets to €500bn
Germany’s upcoming pension reform, slated to take effect on 1 January 2027, will replace the existing Riester system with subsidised brokerage accounts that allow savers to invest in products such as index‑tracking funds and private credit. The reform caps fees on the standard account at 1 %, favouring low‑cost exchange‑traded funds, while also permitting higher‑fee offerings like European long‑term investment funds that provide retail access to private‑equity, private‑credit and infrastructure assets.
Bloomberg reports that private pension assets could rise from roughly €250 billion today to about €500 billion within the next ten years, effectively doubling the market size. S&P Global Ratings estimates that, after an onboarding period of up to two years, the changes could generate between €26 billion and €56 billion of additional annual inflows into German private pensions.
Asset managers are already preparing products for the launch date. Deutsche Bank’s DWS Group, JPMorgan Asset Management and Vanguard have announced plans to roll out suitable funds and portfolios. BlackRock is collaborating with banks and neo‑brokers to offer a mix of ETFs, active funds and private‑market products. Allianz, Germany’s largest insurer, intends to provide both capital‑guaranteed and non‑guaranteed options. Digital platforms such as Trade Republic are also developing offerings aimed at younger and higher‑net‑worth investors.
Consultancies Sirius Campus and Aeiforia calculate that more than one‑quarter of the approximately €225 billion currently held in Riester products could migrate to the new system. The reform is driven by demographic pressure: within a decade the country is projected to have only two working‑age persons for every retiree. Germany’s statutory pension already consumes about one‑quarter of the federal budget, and separate reforms could channel over €30 billion of public pension funding into financial markets while increasing participation in employer‑backed retirement plans.