Counterpart to the statutory public pension scheme. In the funded form, the insurance contributions paid are accumulated as assets. The savings portion is managed by the insurer and invested on the capital market in shares, fixed-interest securities and other securities. The policyholder receives a guarantee from the insurance company that he or she will be able to use the capital paid in, including interest, as a retirement pension at the end of the term. The insurance benefit is therefore based on saved capital, interest income and the profit from the invested securities. – The funded pension became increasingly recommended in Germany from around 2000 and was finally regulated in 2001 in the Retirement Assets Act. The aim is to gradually move away from exclusively pay-as-you-go pensions and to increase the weight of funded pensions in old-age provision. Partially funded old-age provision helps to mitigate the demographic risk of the pay-as-you-go system. By the end of 2012, just under sixteen million Germans had taken out such contracts. The demand for securities generated in this way proved to be a stabilizing weight on the capital market even in times of crisis. – See aging, old-age dependency ratio, pension contracts, nominal value guarantee, pension fund, prudent man standard of care, rabbi trust, pension insurance, statutory, tontine.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
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https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/