The fee cap is narrower than the headline
Lena plans to contribute €1,800 to Germany’s new Altersvorsorgedepot in 2027. If she qualifies directly for subsidies and has two eligible children, the basic subsidy can be €540 and the child subsidy €600. Her first year’s own payment plus subsidies would total €2,940 before fees or market changes. That calculation is useful. The claim that every depot has a 1% fee ceiling is wrong: the Federal Finance Ministry’s current FAQ applies the 1% limit on effective costs to the Standarddepot product.
The Altersvorsorgereformgesetz has passed. The Bundestag approved it on 27 March 2026, and the new products can be offered from 1 January 2027. The market can then include a depot without a capital guarantee, a Standarddepot with preset investment options, and guarantee products. A guarantee-free depot can lose value. The planned launch date is not a promise that any named provider will offer the product you want on the first day.
How €1,800 becomes a maximum €540 basic subsidy
The basic subsidy is proportional to the saver’s own eligible payment. The state adds 50 cents per euro on the first €360 contributed in a year, then 25 cents per euro on the next €1,440. So Lena’s basic subsidy is €180 + €360 = €540 on her €1,800 contribution. Contributions above €1,800 can remain in the contract, subject to the €6,840 annual own-deposit limit, but they do not increase this basic subsidy. A directly eligible saver needs at least €120 of own annual contributions to receive a basic subsidy; a spouse eligible indirectly has different limits.
The child subsidy is not automatic at €300 per child regardless of saving. The current ministry explanation gives €1 per euro of the parent’s own contribution up to €300 per eligible child. At Lena’s €1,800 contribution, each of her two eligible children can produce €300, so the combined state subsidy is €540 + €600 = €1,140. Her €2,940 first-year inflow is €1,800 of her money and €1,140 of subsidy. Eligibility and application records still matter. A saver putting in only €120 does not get a flat €300 child subsidy.
Lena’s first-year pension-depot inflow
Lena’s subsidy is a 63.3% addition to her own contribution at the start. It is not a 63.3% investment return. The assets she buys can fall and the eventual pension is taxed. The child subsidy is tied to each child’s eligibility, so repeating €600 of child aid for 30 years would overstate Lena’s case. The long-run chart deliberately excludes child aid and assumes only her €1,800 own payment plus €540 basic subsidy, or €2,340 at each year-end. At fixed 3%, 5%, or 7% annual returns after costs for 30 years, the resulting balances would be approximately €111,326, €155,467, or €221,038. These are arithmetic scenarios with unchanged contributions and basic-subsidy rules, not forecasts. Market losses, changing income and changing law could make the actual balance very different.
€2,340 paid at each year-end for 30 years, without child aid
Standarddepot, other depots and guarantees
The Standarddepot is one version of the new Altersvorsorgedepot. It has preset fund choices and a gradual move toward a more cautious fund before payouts begin unless the saver changes that setting. Its effective costs must reduce average annual returns by no more than 1 percentage point over the contract period, according to the Finance Ministry. That is a measure of total return drag over the term, not a rule that every individual line item on every depot statement is at most 1%. A different certified Altersvorsorgedepot is not covered by that specific Standarddepot ceiling; compare its actual cost disclosure.
The reform also permits 80% or 100% guarantee products. A saver who wants a guaranteed minimum can compare them with a guarantee-free ETF depot. The guarantee has value to some households but can restrict investment choices and returns. No source here establishes a universal “Riester earned 1.5%” history, a guaranteed 7% ETF return, or a rule that moving to the new product always improves a saver’s outcome. Ask for each product’s investment list, guaranteed terms, effective costs and payout rules before choosing.
| Product or contract | Investment and guarantee position | Cost rule to inspect |
|---|---|---|
| Standarddepot from 2027 | Preset fund choices, no capital guarantee | Effective-cost ceiling of 1% |
| Other certified Altersvorsorgedepot | Permitted funds and other approved assets, no capital guarantee | Contract’s own effective-cost disclosure |
| New guarantee product | Choice of 80% or 100% contribution guarantee | Contract’s own costs and guarantee terms |
| Existing Riester contract | Existing guarantees and terms can continue | Current contract and any transfer charges |
Your old Riester contract can stay
An existing Riester contract is not cancelled in January 2027. The ministry says contracts made before then have grandfathering and can continue under the old subsidy rules. You may be able to keep the same contract and elect the new subsidy calculation, or transfer to a new contract without repaying past state subsidies. A transfer can still involve switching, acquisition or distribution costs. Compare the contract you already have with an actual new quote before changing anything.
The older Riester basic allowance of €175 is a fixed maximum for someone meeting its contribution conditions. The new basic allowance reaches €540 only with sufficient eligible contributions. That is why a chart of the two maxima is a description of the rules, not proof that a transfer raises your net benefit by €365. If you contribute less or have a different tax position, the better outcome may differ. The tax office’s favourable-treatment check may also give a deduction beyond the subsidy in some cases.
Maximum annual basic subsidy under each rule
The ministry FAQ on switching lists both paths. Ask your current provider for an up-to-date value, any surrender or transfer charge, future premiums, guarantee and expected payouts. Ask a prospective provider for the same information. A blanket “transfer if fees exceed 1%” rule ignores guarantees, taxes, costs of switching and the years left until retirement.
What is taxed, and when can the money come out?
Investment gains inside a certified pension contract are not taxed annually during accumulation. The eligible saver can claim the own payment up to €1,800 plus the subsidy entitlement as special expenses; the tax office checks whether that produces an advantage beyond the subsidy. The full amount of a payout attributable to subsidised contributions, their subsidy and growth is generally taxed later as retirement income under § 22(5) EStG. Payouts attributable to non-subsidised contributions are treated differently and must be separated. Do not assume all withdrawals are taxed at a flat capital-gains rate.
The ministry says up to 30% of available capital can generally be taken as a one-off amount at the start of the payout phase without repaying subsidies; that amount is still subject to the applicable tax treatment. Other permitted routes include monthly payments and certain owner-occupied housing uses. A withdrawal outside the authorised rules can require repayment of subsidies and tax advantages. Check the specific contract and obtain advice before using retirement money for a home or moving abroad.
The children's Frühstartrente is a different bill
The reform is designed to connect with a future Frühstartrente: a proposed state payment of €10 a month for eligible children into a Standarddepot. But the children’s programme is a separate bill, and the Finance Ministry’s August 2026 announcement said its legislative process still needed to finish. The ministry’s children’s FAQ likewise describes it as planned. Do not count a €10 monthly payment for a child as an enacted receipt in September 2026.
For your own 2027 decision, calculate the subsidy at the contribution you can afford, check whether each child qualifies, and compare real contract terms. The Altersvorsorgedepot calculator can model the stated contribution and return assumptions. Its projection is a scenario; the actual provider disclosure and the ministry’s current rules should control a decision.
