Entitlements: The disadvantage in maintenance law

Women who divorced between 1977 and 2009 can benefit in particular.
Picture: Picture Alliance

The right to maintenance disadvantages the partner, who takes care of the children and has a shorter career. However, the distribution of pension and pension rights has been fairer since 2009.

AIn the beginning the sky is full of violins. A lot of time is invested in the organization of the wedding party, the search for the perfect dress and the right shoes. After all, everything is done to ensure that the moment proclaimed the “most beautiful day of life” can meet the requirements.

In this situation, hardly anyone would think of a possible end to the intimate togetherness and the associated financial consequences. And so man and woman rely on everything to be going well. But sometimes a look at the statistics helps. Although it says that the number of divorces has been declining since 2011. Marriages now last longer than before until separation – married couples now live on average 14.9 years before deciding to go their separate ways. But in 2018 alone, around 148,000 marriages ended before the divorce judge.


Series – tax return guide: this is new for the tax return for 2019

New in tax law: The tax forms have also been changed this year. What you should consider when filing your tax return for 2019. .

What insured persons should pay attention to

Frankfurt Most people underestimate the risk of becoming disabled. On average, however, one in four will fail at least once for a longer period in the course of their professional life. If there is no earnings, most consumers will lack their main source of income.

Occupational disability insurance, or BU for short, cushions the financial consequences and is therefore considered one of the most important forms of insurance for private individuals – especially during the coronavirus pandemic. Experts expect more benefits, including mental illness and consequential damage from Covid 19 disease.

Potsdam-based specialist broker Frank Dietrich says: “The psychological stress in the corona crisis is increasing. I expect a larger wave of depression, which will be favored by social isolation. As a result, some patients will no longer be able to practice their profession, or only partially. ”

In general, the BU insurance pays a pension if, for health reasons, the insured person can no longer work permanently or only to a certain extent in their own profession. Some policies also apply if there is a long-term ban on work due to the risk of infection.

However, many occupational disability policies also reveal weaknesses in the crisis, especially when it comes to this so-called infection clause. If you are thinking about a new contract, you should consider a few points.

Mental illnesses are increasing. But even before the corona crisis, they were the most common cause of disability. They account for almost a third of insurance claims, as data from the Association of the German Insurance Industry (GDV) shows.

Around a fifth of the cases are related to back or joint problems and osteoarthritis. Accidents are only nine percent responsible for occupational disability.

Often, however, it is difficult to prove mental illnesses to the insurer, complains Dietrich. According to the GDV, only every fifth application for a BU pension is rejected. However, the most common reason for rejection is that the insured person does not reach the agreed level of disability, usually 50 percent.

In the case of unclear cases, it could be advantageous for the insured person not only to submit the existing medical documents, but also to have a medical report drawn up. According to the GDV, 63 percent of all reports lead to a positive benefit decision for the insured. When it comes to the psyche, Dietrich also advises its customers to seek inpatient treatment. Then the case is usually clear.

Disabled due to consequential damage

There could also be more insurance claims in the BU in the future because permanent damage may also remain after a coronavirus infection. According to experts, this could permanently damage the lungs and the heart. It is also being discussed that the virus could trigger meningitis, which could then lead to consequential damage.

According to Dietrich, good policies also pay a BU pension if the insured can still work with these consequential damages. It only has to be less than 50 percent of what he could work on days when he was still healthy.

The Federation of Insured Persons (BdV) also points out that insured persons who work in parallel to receiving a BU pension may also receive short-time work benefits in the current situation. This has no impact on the existing disability pension.

Dietrich considers it important that BU contracts also include a so-called incapacity clause (AU). Because while the occupational disability policy protects the insured if they can no longer practice their profession in the long term, the daily sickness insurance takes over if the customer is temporarily unable to work.

The problem that the daily subsistence insurer could now say that the customer is unable to work and that the occupational disability insurance states that he is unable to work – and thus neither of them wants to pay – can be eliminated by an AU clause, Dietrich explains. Then the customer receives a pension from his BU insurance for a certain period of time, even if no incapacity for work has been determined, but only incapacity to work.

Few policies with infection clause

In connection with the corona crisis, the keyword infection clause repeatedly comes up. If it is included in the contract, the insurer pays a BU pension if there is an official or judicial order stating that the work must not be carried out for at least six months due to the risk of infection.

At the BdV, it is said that there are currently no empirical values ​​known that “permanent employment bans are being imposed because of Covid 19 infections.” Dietrich counters, however: “A few weeks ago we could not imagine the current situation. Who knows what will come despite the planned gradual easing. “

However, he had the experience that only about five percent of the BU contracts contain well-formulated infection clauses. Many policies do not contain such a clause. Some insurers limit benefits to certain professional groups.

Even those who have already been infected with the corona virus can still conclude a BU contract. “A well-cured Covid 19 disease does not in principle stand in the way of taking out occupational disability insurance,” says the industry association GDV.

Consequential damage could become a problem. The ability to insure is sinking because consumers have to state the illness when answering the health questions, according to Dietrich: “If you want to conclude a contract now, the health insurer should give you the listed treatment data and the medical record of the family doctor.” Only if the health questions at the If the application is answered correctly and completely, the consumer has a chance in the event of an insurance that the insurer also pays.

More: How insurance customers can save in the corona crisis


Coalition argues again over basic pension schedule

Hubertus Heil

The SPD rejects the demands of its coalition partner to stop the basic pension plans.

(Photo: dpa)

Berlin In the middle of the corona crisis, a new dispute over the basic pension broke out in the coalition. Leading SPD politicians rejected calls from the Union on Friday to rethink funding and the timing of the basic pension in the face of the pandemic.

“Questioning the basic pension at Easter and in times of Corona is evidence of a lack of political responsibility,” said SPD parliamentary group leader Katja Mast of the German Press Agency in Berlin. “Whoever applauds everyday heroes shouldn’t forget them even after the crisis.”

The head of the labor and social work group of the Union faction, Peter Weiß (CDU), told the magazine “Focus” that the financing of the basic pension in the form previously planned could not be realized. “We have amassed a huge mountain of debt to deal with the corona crisis. Therefore, we have to sit down in the coalition after the pandemic and take a closer look at the financing, ”he said.

The schedule for the entry into force of the basic pension must also be reconsidered. Union faction vice Carsten Linnemann (CDU) had already asked in March to put the project on hold.

Labor Minister Hubertus Heil (SPD), on the other hand, insisted on the implementation of the plans for the basic pension and partial abolition of the solidarity surcharge for 90 percent of taxpayers, despite the corona crisis. He told “Focus” about the abolition of solos: “We are relieving the citizens of what is important for stimulating the economy after the crisis. In the end, this also applies to the basic pension. ”The state should be reliable and the improvements decided now should not be reversed.

Mast demanded that elderly care assistants and many cashiers who often earned little would need better wages and a basic pension. “So misusing the corona crisis now to question the basic pension again is shabby.”

The Federal Government has decided to introduce the basic pension on January 1, 2021 and to cancel the solidarity surcharge for 90 percent of taxpayers. The pensions of around 1.3 million people with small earnings are to be improved. Long-term low earners who have at least 33 years of contribution periods for employment, education or care should be able to receive the basic pension. In the starting year, it should cost 1.4 billion euros.

The government passed the basic pension bill in February. For the plans to become law, the Bundestag and Bundesrat still have to agree. In February, doubts arose due to the administrative burden as to whether implementation by the pension insurance scheme could be achieved at the beginning of 2021.

More: Employers are exerting pressure to change the basic pension in parliamentary proceedings. The benefit should only apply to new retirees.


The capital guarantee for the Riester pension is a problem

Older couple on the beach

The subsidized supplementary insurance should help in old age.

(Photo: Unsplash)

Frankfurt It was certainly well-intentioned, but it did not lead to the goal: the capital guarantee for the funded private pension scheme called the Riester pension. The bottom line is that this obligation to guarantee the contributions paid in at the start of the payout phase prevents the capital that is usually invested for decades from being invested sufficiently in shares. Opportunities for returns disappear.

No wonder that the providers of fund products in particular are calling for the capital guarantee to be abolished in the planned Riester reform. Consumer advocates want even more. The federal government is preparing for reform. But savers can do something today.

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The pension debate is based on a deceptive standard

Pensioners in Berlin

The level of pensions will probably rise in the crisis. This does not give pensioners more money.

(Photo: dpa)

A commission of ten experts was to create what the Union and the SPD failed to achieve in their coalition negotiations: to develop a perspective for retirement in an aging society.

The chances of success were slim. Because not only were those politicians from the coalition who did not agree before. The unions and employers, who often disagree on the pension, also had their say.

The recommendations in the now published final report remain vague, the question of the future retirement age is even outsourced to another commission. For a long time, the experts also advised on the further development of the pension level, without ultimately reaching a consensus.

The SPD and unions in particular have symbolically charged pension levels in recent years and made them the standard for justice. This fixation on a statistical value is a mistake and hinders the reform debates. Because the current pension level of 48 percent is a calculation that hardly anyone outside the specialist understands.

When there is talk of a falling pension level, this often triggers the false fear of pension cuts. Because the lowering of gross pensions is legally excluded.

The level of pensions also says nothing about the level of individual entitlements. It expresses the ratio of standard pension to average income in Germany. A falling level means that pensions are rising more slowly than wages.

The corona sequences show how deceptive this size is. The economist Axel Börsch-Supan expects that annual wages for employees will decrease noticeably – which should lead to an increase in the calculated pension level.

The union demand for a pension level of at least 50 percent could therefore soon be met – even if nobody has more money in their pockets.

More: Minister of Labor Heil wants to start another pension reform this year


This is how Hubertus Heil wants to secure his pension

Bundessozialminister Hubertus Heil (SPD) plans to present another pension reform soon, which will stabilize the level of security for pensioners beyond 2025. “I will make specific proposals for this by autumn, which we will then advise in the federal government,” he announced on Friday. He wanted to implement the central recommendations of the government’s pension commission before the general election. He was particularly pleased that this had confirmed the political concept of the “double stop line” for the pension level and contribution rate. The committee of Union and SPD social politicians, representatives of the social partners and three scientists had recently submitted its report. It concluded almost two years of consultations.

Dietrich Creutzburg

The 127-page report identifies the problem of “considerable additional financial burdens in pension insurance” due to the aging of society, but does not recommend a major restructuring of the pension system, but above all more political control of the annual pension adjustments and the contribution rate. In this way, in addition to the contributors, the Commission indirectly also has a greater responsibility for the federal budget. Beyond that, she recommends strengthening private supplementary pensions – the so-called Riester pension – through higher subsidies and improving the transparency of pension products.

For statutory pensions, she advises that in the future both the pension level and the contribution rate should be controlled on a permanent basis using politically specified “holding lines” – these would have to be determined by the government in seven-year increments. If the stop lines then do not match economic reality, taxpayers would have to pay more subsidies to the pension fund.

It should be “at least 48 percent”

Specifically, the Commission believes that the government should choose between 20 and 24 percent of gross wages as the upper limit for the contribution rate. As a lower limit for the pension level – based on the average wage – a value between 44 and 49 percent should be provided; and this for the first time for the years 2026 to 2032. By 2025, the limits already set by the coalition apply: up to 20 percent for the contribution rate and at least 48 percent for the pension level. So far, the contribution has been 18.6, the pension level just over 48 percent.

However, the SPD emphasized that it did not want to allow a lower level of pensions. It should be “at least 48 percent”. “We also say very clearly that this will cost more money,” added SPD parliamentary group deputy Katja Mast. Heil said it would “talk to the coalition partner”. That is not enough for the German Trade Union Confederation (DGB). In a special vote in the report, he calls for a pension level of 50 percent. That would mean that even if the number of pensioners rose, pensions would have to increase more than wages. CDU / CSU parliamentary group representative Hermann Gröhe said on Friday that the Union wanted to avoid “overwhelming future generations and the economic strength of our country”.

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In the absence of agreement, the Commission made no decision as to whether the age limit should continue to rise as life expectancy increases after 2030. Instead, she advises that in 2026 an advisory board should check “whether an increase in age limits is necessary and justifiable”. The economist Axel Börsch-Supan, one of the scientists in the commission, does not support this: “Postponing a decision about the future standard age limit” is “not in the interest of the people concerned and does not do justice to the responsibility that this commission must bear itself “. If you want to give security, you must also clearly name the uncomfortable.

“Cut costs with Riester contracts”

Contrary to what the Union and SPD had agreed in the coalition agreement, the Commission does not propose any concrete changes to the pension adjustment formula – nor does it abolish the sustainability factor that is intended to dampen the annual pension increases if the financing burden for the contributors increases too much. However, this generational balance is indirectly limited by the “stop line” for the pension level.

Because it would take precedence if the factor pushed the pension level below the limit. In addition, the Commission has examined whether civil servants should be included in the statutory pension scheme – and rejected it. Her test result: “The financial relief that initially arises” would be offset by “long-term high additional pension benefits” for the then legally insured civil servants. This would “probably make it more difficult to finance pension insurance,” said the Commission report.

For private supplementary pensions, however, the Commission recommends several improvements in the existing system. For the Riester pension, this includes “an increase in the basic allowance and / or a dynamic increase in line with wage developments”. In addition, it is important to “reduce the costs of Riester contracts” – for example, through a “state-organized platform” that lists products at low costs and through the introduction of a standard pension product – “in the sense of a new product standard”, as the Commission writes. The idea of ​​a state-organized investment fund is only mentioned as an option without a specific recommendation.


Is a sovereign wealth fund a threat to the financial industry?

Munich For many years, the financial sector could rely on a cross-party network for private pensions. Until the turn of the millennium, the Union provided tax exemption for capital life insurance and Gerhard Schröder’s red-green federal government provided state funding for old-age provision named after his Minister of Labor Walter Riester.

But now politics is no longer good to speak of in the industry. “Before the introduction of Riester, the insurance industry promised us heaven on earth. In particular the introduction of a standard product. Nothing happened. Really nothing, ”complains Karl-Josef Laumann, chairman of the CDU’s powerful workers wing. Laumann criticizes an opaque jungle of products that are expensive and also bring little return. If the state did not invest billions in funding, there would be nothing for the citizen to “get around” with. It is therefore no wonder that people are reticent about private retirement provision.

In fact, the number of Riester contracts has been stagnating at around 16 million since 2016, after sales rose sharply between 2005 and 2010 since they were introduced in 2001. The number of products sold by far, based on pension insurance, has even decreased by a good 300,000 contracts to 10.7 million contracts since 2011, while Riester funds grew to a total of 3.3 million policies in the same period. The criticism regarding the lack of transparency and the high costs is justified for many Riester products. Many problems have been caused by politics.

Expensive capital guarantee

For example, the legislature has prescribed to the product providers the guarantee of the contributions paid in at the start of retirement. This guarantee can often only be achieved with a high proportion of fixed-income securities. The European Central Bank’s zero interest rate policy has subsequently depressed the return on guaranteed products. The Christian Democratic Workers’ Association (CDA) does not leave it at the general criticism of the Riester pension, but also suggests an alternative to the existing products. Because private pensions should become significantly more efficient, fair and binding, they are calling for the introduction of a state-organized standard product. A statutory cost cap, the waiver of transaction costs and free advice to investors are intended to compete vigorously with the products on the market.

The CDA remains unexplained why it allocates a state-organized standard product to private pensions. A mistrust of the state pension is appropriate: Finally, the private Riester pension was introduced by the legislature on the initiative of the Schröder government, because the state pension alone was no longer sufficient to ensure the standard of living in old age. Since the statutory pension based on the pay-as-you-go system is particularly affected by the aging of society, it was decided in 2005 to lower the statutory pension level, which was to be compensated for by the state-funded private Riester pension.

However, within the grand coalition of the Union and the SPD, there does not currently seem to be a majority for a state-organized pension fund. The Union’s entrepreneurial wing – such as the former Blackrock Supervisory Board Friedrich Merz – advocates strengthening equity investments, but is rather critical of the expansion of state powers in old-age provision. The SPD, on the other hand, rejects a funded sovereign wealth fund because the Social Democrats prefer to expand the pay-as-you-go statutory pension instead.

Number of the week



Riester contracts have been concluded by German citizens. The number has been stagnating for years.

However, a funded sovereign wealth fund could have a majority in the Bundestag after the next Bundestag election. Because in addition to the CDU workers’ wing, Alliance 90 / The Greens also advocates this. “It’s time for a civic fund,” says Robert Habeck, party leader of the Greens. The term “citizen fund” should not hide the fact that Habeck means a sovereign wealth fund and is considered the model for the world’s largest sovereign wealth fund, the fund financed from oil revenue in Norway.

However, while the latter mainly invests internationally in large public companies outside of Norway, Habeck is more of a nebulous target bundle for a German sovereign wealth fund. “The fund should be open to all citizens and invest in the long-term restructuring of the economy,” said the party leader of the Greens. Citizens would benefit from increased profits, and at the same time the fund could stabilize the situation on the financial markets.

The German pension industry is not at all enthusiastic about the proposal of a state-organized fund. With the competition from a sovereign wealth fund, it fears the loss of its “bread and butter business”. In addition to fears of income and livelihood, plausible objections to a sovereign wealth fund are also raised. “There is no empirical evidence that a sovereign wealth fund invests capital better than private sector institutions,” warns Andreas Wimmer, board member corporate clients of Allianz Lebensversicherung. A sovereign wealth fund would also raise questions of security as a pure commitment to contribute. So it is unclear who bears the risk of fluctuations in value or what happens if the fund develops strongly negatively shortly before retirement.

In a joint statement at the end of 2019, the associations of the insurance industry (GDV), fund companies (BVI) and building societies instead proposed the reform of private pension provision in a five-point plan. Thereafter, there should be standard products without complicated options, a simple state subsidy of 50 cents per euro saved, the opening of subsidies for the self-employed, the relaxation of the contribution guarantee and a simplification of the allowance procedure.

Swedish role model

Instead of competing with a sovereign wealth fund, the state should expand and simplify funding. Consumer advocates have little understanding for this. They also favor a standard product and, in order to keep the costs for savers as low as possible, a state-organized fund based on the model of the Swedish state fund Safa. The investment risk due to a high equity component does not speak against it. “A simple strategy consisting of stocks plus reallocation would be significantly better than complicated insurance or the Riester savings stocking,” says Dorothea Mohn, finance team leader at the Federal Consumer Association (VZBV).

It is based on an expert opinion from the ZEW Economic Institute in Mannheim, which is funded by the Ministry of Consumer Affairs and initiated by the German Bundestag. In the study “Capital investment by a state-organized pension fund”, the authors, Tabea Bucher-Koenen, head of the ZEW research area “International Financial Markets and Financial Management”, her colleague Jesper Riedler and Professor Martin Weber from the University of Mannheim advocate a high proportion of shares. The calculation was based on an average earner who invests four percent of his or her gross income on the capital market for 45 years and who has the savings in retirement age with a retirement plan from 90 onwards.

Based on historical returns for bonds and stocks and a random number generator, the average nominal monthly pension for a purely equity portfolio is EUR 5560. In the worst five percent of the simulation cases, the monthly pension was less than 1650 euros and in the best five percent of the simulations more than 22,900 euros. Alternatively, mixed portfolios in which the proportion of shares is reduced with increasing age according to the life cycle model, as well as a mixed portfolio with half the proportion of shares and annuities, were examined. On average, they have significantly lower pension payments than the pure equity portfolio, but their diversification is significantly less.

The experts’ conclusion: “The equity portfolio with a life cycle shift would be best suited as a standard portfolio.” So you recommend a kind of Riester fund with no guaranteed contribution. But they also advocate an opening option for investors: “Depending on their risk attitude and risk-bearing capacity, people should be given the opportunity to deviate from this portfolio and select riskier or less risky portfolios.”

From the perspective of investors, the legitimate question remains why they should entrust their money to the state rather than to the financial sector. Finally, the decisions on statutory pension insurance in recent years have shown that the parties like to sacrifice a contribution-based pension benefit in favor of election redistribution for their electorate. Investors who want to invest in shares as cheaply and widely as possible do not need a sovereign wealth fund. This can be achieved with exchange-traded ETFs as required. Nor are they at risk that the government could use the fund’s investor funds for other purposes.

The complete edition of the Handelsblatt Finanzberater Edition can be found here.


Employers want to make final changes to their basic pension

Hubertus Heil

The labor minister prevailed with a concept that drew the circle of beneficiaries further than the Union originally wanted.

(Photo: dpa)

Berlin The resistance of the employers to the basic pension plans of Federal Labor Minister Hubertus Heil (SPD) was great. Now they seem to have resigned themselves to the fact that the law passed by the cabinet in February can no longer be stopped.

In contrast, the Federal Association of German Employers’ Associations (BDA) hopes for further changes to the draft in the parliamentary procedure, which begins on Thursday with a consultation in the Federal Council. The catalog with suggested corrections is available to the Handelsblatt.

The employers adhere to their fundamental concerns: “The planned basic pension is not a suitable contribution against poverty in old age, because the target group of long-term employees is particularly rarely affected by possible poverty in old age anyway.”

However: “If, despite all objections, the legislator still wants to stick to the introduction of the planned basic pension, then he should at least make some substantial corrections to the legal plans,” says the statement.

For example, the basic pension should only apply to future pensioners and not to the pension portfolio. This would “take into account the fact that many pensioners today benefit from other pension regulations that no longer exist with current pension access”. This included the deduction-free pensions from the age of 60 and pension-increasing recognition of training periods.

There is intense argument about details

In their coalition agreement, the Union and the SPD had agreed to improve long-term low-wage earners with low pension entitlements and thus protect them from going to the social welfare office in old age.

The details were the subject of heated argument. In the end, Heil prevailed with a concept that drew the circle of beneficiaries further than the Union originally wanted. Instead of a comprehensive examination of the financial situation of retirees, the aim is to use income to check whether there is a right to a pension increase.

The employers justify the required limitation to new retirees by saying that currently only one percent of all over-65s with at least 35 years of employment are dependent on social assistance in old age. In today’s pension portfolio there is therefore “no special need for social policy action”.

The BDA also requires clarification that the pension insurance must be reimbursed by the federal government for all costs incurred for the basic pension. The previously planned increase in the tax subsidy is not enough because otherwise the pension fund would bear all cost risks. In addition, the federal reimbursement to the pension insurance must also include the high administrative costs resulting from the introduction of the benefit and the income test.

The BDA is particularly critical of the planned procedure to check investment income. Pensioners should report such income to the pension insurance company in a self-assessment. “The administrative costs required would be higher than the services saved by crediting,” says the statement. If no other solution could be found, “it would be better not to count this income altogether”.

More: Hubertus Heil has landed a coup with the basic pension, says Handelsblatt editor Gregor Waschinski.


Why stocks are good for old-age provision despite falling prices

The curve in the trading hall of the Frankfurt stock exchange.
Picture: dpa

The price losses caused by the spread of the corona virus raise the question of how much fluctuation is acceptable for the pension. Conditions like those in America after the financial crisis can be avoided with the right design.

Dhe international equity markets have suffered significant losses in recent weeks due to the rapid spread of the corona virus. The German stock market barometer Dax lost around 19 percent of its value last month, the market-wide American index S&P 500 around 17 percent and the French leading index CAC-40 around 21 percent. This development falls in the middle of a discussion that has so far been held behind closed doors about a fundamental reform of state-funded old-age provision.

Philipp Krohn

Philipp Krohn

Business editor, responsible for “People and Business”.

One of the key considerations: Due to the fall in interest rates in recent years, especially as a result of the international financial crisis, retirement planning should focus more on investment in productive capital – otherwise the pension gap can only be closed with difficulty due to demographic change. The ideas of the Hessian state government for a German pension and an “extra pension” from consumer advice centers are also based on higher equity commitments.