Retirement savings account 2027: what applies from 1 January and which investments are permitted

Do you have an ETF savings plan and are wondering whether the new retirement savings account will change your pension provision? A state-subsidised account, in which you can select funds yourself, is set to launch on 1 January 2027. Under the passed legislation, a subsidy of 180 euros will be added to the first 360 euros of your own annual contributions. However, the more interesting question for experienced investors is which funds are permitted in the account and what the wider selection will cost.

The Bundestag passed the Retirement Provision Reform Act on 27 March 2026, and the Bundesrat approved it on 8 May 2026. The first products are scheduled for 1 January 2027.

The retirement savings account in brief

• Launch: 1 January 2027
• Basic subsidy: 50 per cent on the first 360 euros of personal contributions, 25 per cent on contributions up to 1,800 euros; maximum 540 euros per year
• Child subsidy: up to 300 euros per child per year
• Career starter bonus: a one-off payment of 200 euros for those starting before their 25th birthday
• Deposits: up to 6,840 euros per year, or up to 13,680 euros with two contracts
• Variants: guaranteed product, standard account, and flexible retirement savings account
• Cost cap: 1.0 per cent effective annual cost, only for the standard account
• Investments in the flexible account: specific funds up to risk class 5 and euro-denominated bonds from public issuers

What is the retirement savings account?

The retirement savings account is a state-subsidised account for private pension provision. You make contributions, the state adds subsidies, and the money is invested in the capital market. Which funds you can choose depends on the account variant.

The most important difference compared to Riester: the retirement savings account does not require a full contribution guarantee. A lifelong annuity is also not mandatory; among other options, a payout over a fixed period is provided for. However, more freedom in investment also means that the value of the funds can fluctuate and fall below your contributions. Hendrik and Robin discuss what this difference means for your choice of account in episode #70 of our podcast Diversify.

The reform is sometimes referred to in headlines as the "Klingbeil Pension," named after Federal Finance Minister Lars Klingbeil. It refers to the retirement savings account (Altersvorsorgedepot).

Launching 1 January 2027: The successor to Riester

From 2027, no new Riester contracts will be taken out. Existing protection applies to Riester contracts concluded before 1 January 2027. You can continue your contract as before, switch to the new subsidy scheme by notifying your provider, or move to a new contract, such as a retirement savings account. You do not have to pay back any subsidies received to date if you switch, but switching, set-up, and distribution costs may apply. If you cancel the contract instead, previously received subsidies may be clawed back.

What this means for you: before considering a switch, check the costs and guarantees of your existing contract. The key is to compare these with the actual terms of a new offer, including the costs and the options available at the time of payout.

Subsidies: How much the state contributes

The basic subsidy is tiered. For the first 360 euros of your own annual contributions—that is, 30 euros a month—you receive a 50 per cent top-up. For contributions above this amount up to 1,800 euros, a 25 per cent rate applies. If you contribute 1,800 euros yourself per year, you reach a maximum basic subsidy of 540 euros.

An additional subsidy of up to 300 euros per child per year is available. Those who start before their 25th birthday can receive a one-off career starter bonus of 200 euros.

The annual contribution limit is set at 6,840 euros, or up to 13,680 euros for two parallel contracts. The basic subsidy does not increase for personal contributions above 1,800 euros. Therefore, especially with higher contributions, it is important to consider not just the subsidy, but also the tax treatment of returns during the accumulation phase and subsequent payouts. On top of this are the ongoing costs: even small differences can add up significantly over many years.

Standard account or flexible account: The options

The plans include a guaranteed product, a standard account, and a flexible retirement savings account. With the guaranteed product, at least 100 or 80 per cent of the contributions paid in will be available at the start of the payout phase, depending on the contract. If you already invest in ETFs, you will likely be most interested in the choice between the standard account and the flexible account: how much do you want to choose yourself, and what are the associated costs?

The standard account

In the standard account, the provider selects two UCITS funds—regulated public funds, which include ETFs: one cautious fund in risk class 1 or 2, and one growth-oriented fund in risk class 3 to 5. You decide how your contributions are split between the two; if you do not, the allocation specified in the contract applies. A statutory cap of 1.0 per cent in effective annual costs applies here. This figure indicates how much, on average, costs reduce the annual return until the start of the payout phase. This allows you to compare the stated costs of different offers.

The flexible retirement savings account

In the flexible retirement savings account, you can select the investments yourself if your contract provides for this option; otherwise, the provider selects from the permitted investments. In addition to ETFs and other public funds, shares in open-ended ELTIFs may also be eligible under the law. An ELTIF is a European fund structure for long-term investments, such as holdings in private companies. A limit applies to funds in the flexible account: they must not be classified higher than risk class 5 on a scale of 1 to 7 in their Key Information Document (KID).

This is a point we would look at closely when it comes to ELTIFs. The name alone does not indicate whether a specific fund meets the requirements; what matters is its classification in the Key Information Document. You can read more about the fund structure in our overview of ELTIFs, and which rules have applied since the reform, in our article on ELTIF 2.0We explain what the risk class 5 limit means for individual asset classes in our article on ELTIFs in retirement savings accounts. Which ELTIFs are actually offered in a retirement savings account also depends on the individual provider.

There is no statutory price cap for flexible accounts. You should therefore compare the total costs of a specific offer with those of the standard account and check what selection you get for that price. NAO does not currently offer a certified retirement savings account.

What is excluded

Individual shares, cryptocurrencies, certificates and leveraged products are excluded from retirement savings accounts by law. This also applies to funds with risk class 6 or 7. If you wish to hold individual shares, you can continue to use your regular account for these, without the retirement savings account subsidies.

Providers and costs

By law, providers may include banks, building societies, fund management companies and life insurers, provided their product is certified. Whether a provider actually launches and which funds they offer will become clear once specific offers are available. A complete list of providers was not yet available at the time this article was written. Products are certified by the Federal Central Tax Office, initially subject to revocation from 2027. The law also allows for a public body to offer a standard account under the same rules. The necessary government regulation for this has not yet been issued.

A cap of 1.0 per cent in annual effective costs applies to the standard account. The 1.0 per cent is a maximum limit; offers may be lower. This statutory cap does not apply to flexible accounts. When looking at these, pay attention to the costs of the account and the chosen funds so that you can compare offers fairly.

What does this mean for your decision?

The subsidy is easy to calculate. How well an account suits your retirement planning also depends on the fund selection, costs, investment horizon and withdrawal rules. Before you start, you might want to ask yourself these questions:

• How much would you like to contribute per year, and what subsidy does that result in?
• Is the selection in the standard account sufficient for you, or would you like to put together your own funds?
• What does your existing Riester contract cost, and what guarantees does it include?
• What is the risk class of the funds you would like to hold in a flexible account?

Especially with an ELTIF, the redemption rules should be included in your comparison. Your capital may be tied up for a long period, redemptions may be restricted, and losses up to a total loss are possible.

Do you have questions about how ELTIFs and private marketsare classified? Our customer service team is available to help you personally on weekdays. Please feel free to write to us.

FAQ

When will the retirement savings account (Altersvorsorgedepot) be available?

The launch is scheduled for 1 January 2027. Specific offers and terms will depend on the respective providers.

Is the retirement savings account the successor to the Riester pension?

Yes, it is intended to replace Riester as the state-subsidised private pension scheme for new contracts. Existing Riester contracts can continue to run.

How much is the subsidy in the retirement savings account?

By law, the basic subsidy is up to 540 euros per year for a personal contribution of 1,800 euros. In addition, there may be child allowances of up to 300 euros per child and a one-off bonus of 200 euros for those starting their careers.

How much does the retirement savings account cost?

For the standard account, there is a cap of 1.0 per cent in annual effective costs. There is no corresponding statutory cap for the flexible account; the terms offered by the provider and the chosen funds are the deciding factors.

Which investments are permitted in the retirement savings account?

In the standard account, the provider specifies two UCITS funds between which you split your contributions. The flexible account allows for UCITS, open-ended retail AIFs and open-ended ELTIFs up to risk class 5, as well as euro-denominated bonds from public issuers.

Am I allowed to hold ELTIFs in the retirement savings account?

An open-ended ELTIF may be eligible for the flexible retirement savings account if it meets the legal requirements and is offered there. The risk class in the Key Information Document (KID) is particularly important: by law, it must not exceed 5.

Can I put individual shares into the retirement savings account?

Individual shares are excluded from the retirement savings account by law. For these, you should continue to use a regular brokerage account without the retirement savings account subsidy.

What happens to my Riester contract?

Your existing Riester contract is protected and can continue to run. You can also switch to the new subsidy scheme or transfer the balance to a retirement savings account without having to pay back any subsidies; if you cancel the contract, any subsidies received may be reclaimed.

Why is the retirement savings account also called the "Klingbeil pension"?

The term refers to Federal Finance Minister Lars Klingbeil, whose ministry is responsible for the reform. It refers to the retirement savings account.

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This article is for information purposes only and does not constitute investment advice. ELTIFs are long-term investments: capital may be tied up for the duration of the term, redemptions are restricted, and losses up to the total loss of capital are possible. The Key Information Document (KID) and fund documentation are the definitive sources. For funds in the NAO app, you can find both directly in the app.

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