Sinking pension factor: what that means for your private pension

Sinking pension factor: what that means for your private pension

alarm level red for pension insurance! If you have invested in a private fund -bound pension insurance, you could soon experience a nasty surprise. If the payment of the monthly pension is due, it could turn out that the pension factor that decides on the amount of the pension was dramatically reduced! An often overlooked paragraph - Section 163 of the Insurance Contract Act (VVG) - gives insurance law the ominous right to reduce the payments after years of saving!

The dark news is no coincidence. According to a current analysis by the market research institute Franke & Bornberg, the pension factor from 2021 to 2022 deteriorated almost everywhere. This factor, that is the key to calculating the monthly pension, fell from 29.09 euros to just 25.97 euros! A decline of more than 10 percent! Who would have thought that so rabidly was converted behind the scenes?

The pension factor explains: What does that mean?

for the laypersons among us: The pension factor determines how much pension you get from your saved capital. A simple calculation: With a pension factor of 30, a balance of 100,000 euros results in a monthly pension of 300 euros. But woe when the factor drops! With a pension factor of 25 you only get 250 euros per month. With such a price calculation, questions remain unanswered: where is the transparency?

The rescue: "Hard guarantee" by waiving § 163 VVG

A way out is the so -called "hard guarantee". However, insured persons must ensure that the insurance company waives Section 163 VVG in the contractual terms. This ensures more security in pension payment. However, warning the consumer advice centers and the information portal Contract Aid24: Due to the high costs and the often lean returns, life and pension insurance should generally be viewed skeptically.

What should you do if reality looks so dark? According to the experts, it is not advisable to terminate the contract or decommissioning the contract! Instead, insured persons should have their contracts checked with experts in order to find real alternatives. The platform www. contractshilfe24.de reveals whether this works - fast and uncomplicated!

The message is clear: At the latest now, everyone who has invested in private pension insurance should be aware of. The dreary truth can no longer be ignored if your age is approaching!

Berlin - A explosive call to vigilance is necessary, because the trusting pensions could quickly turn into a bitter disappointment!