No, Mr. Customer: Your money isn’t gone – it’s just gone to someone else!

A Rürup pension cannot be inherited, given away, sold or lent. Those who have debts, on the other hand, risk beingss creditor seize and exploit the accumulated Rürup assets before retirement.


And if the state would have to pay, for example, Hartz IV or court cost assistance, it can refuse this because of the Rürup assets and refer the pension saver to the extraordinary termination of his Rürup contract, even before the pension begins, at least down to a pension at social assistance level. Those who provide for their old age through pension schemes or voluntary payments into the German pension insurance are better off.

In other cases, the insurance customer himself can at best have his contract made non-contributory: If supplementary occupational disability insurance (BUZ) has been included in the basic pension, there is then a risk of loss of risk protection in the event of occupational disability and thus an existential risk.

Almost always a classic in agent liability, because if you’ve gotten too sick in the meantime, it’s hard to find an insurer that will provide coverage. If the insurer promises a “BUZ saviour” as an option to continue the BU provision in the so-called layer 3, the rude awakening can come, because this represents a new conclusion without a health check, but due to new calculation bases the double premium can well be due for it, and also the tax deductibility is omitted.

In addition, the customer cannot yet know the (new) insurance conditions that will then be in force, no matter how bad they may have become in the meantime.


Funded pension

One million insured often unprofitable?

Even a savings account, critics say, is more profitable than a basic pension. And there are also cases of expected negative returns when acquisition and administrative costs are higher than the guaranteed interest rate. Also, because of the cost burden on insurers, it is probably only in the stars whether inflation can ever be offset by uncertain surpluses. Model calculations are not infrequently based on interest rate expectations that are too high and therefore show a return that cannot even be expected as certain today.

In the case of annuity insurance, extremely long life expectancies are calculated – if only for reasons of prudence and because collateral is included to anticipate fluctuations and even greater improvements in life expectancy than realistically forecast.

This reduces the return of the Rürup pensioner and increases the mortality profit of the financial houses. Even the legal obligation for transparency through cost disclosure in product brokerage has not changed the fact that product comparisons can still almost only be made by knowledgeable experts.

Many also do not really get to grips with the statement of costs hidden in the consumer information, because they do not even realise that they are supposed to pay these costs themselves out of their contributions before any money is invested for them.


Which unfortunates do not find recognition of their Rürup deposits with the taxman?

Even at least one very reputable insurer incorrectly trains its agents, resulting in the taxability of survivor annuities if the insurer’s own retirement annuity is less than 50% of the premium. This is the case if other additional inclusions such as death cover for surviving dependants or also for BUZ – but not for the BUZ premium waiver – have a premium share that is too high. Such design errors on the part of the insurance intermediary are regularly only noticed by the customer years later, when the tax deduction is partially or completely denied by the tax office.

Even if everything has actually been done “correctly”, but unfortunately the contributions for the additional death cover or BUZ cannot be shown separately and thus separated, the entire contribution may not be recognised by the tax office.

If an inheritability of the paid-in contributions is to be guaranteed (return of contributions), this “module” must be calculated separately and cannot be deducted like a basic pension. In most cases, there is no question of a tax deduction at all, because the pension expenses have been exhausted by private health insurance and other insurance premiums.

The tax office also refuses recognition as a basic pension if a return of contributions in the event of death is provided for after the start of the pension, or pension guarantee periods with a similar effect. This can only be avoided if the exclusive use after conversion into a life-long annuity for the surviving spouse or an orphan’s pension is agreed from the outset.

Or a survivor’s pension is agreed in the event of death, but it is forgotten to limit the receipt of the pension to the surviving dependants. Some insurers also sell an occupational disability pension that does not provide benefits until the start of the old-age pension – the tax office then regards this as a temporary pension that is not to be recognised, which leads to the refusal of the special expenses deduction.

Resourceful tax officials also find something in the crumbs: this is what happens to clients whose pensions are paid up to the month of death, for example, but subsequently to the last of the month; a small mistake, because this is seen as contradictory to non-inheritability, and any tax deduction for anything is denied. If necessary, it will also be scarce to ensure the minimum 50% of the contributions for the old-age provision because the BU insurance has been optimised too much.

Example: 5,200 less 250 from offset surpluses are paid for BU, 5,000 for AV, i.e. more than 50 %. Then the BUZ offset surplus drops to 100 – and thus 5,100 accrues for BU – the full deduction is denied.

Since lump-sum contributions are also possible, someone could get the idea of paying the BU contributions on an ongoing basis at first, and then a little more for the old-age pension at a later suitable time in the year. Then he misses this (e.g. for lack of money) – and nothing is deductible.


Full tax liability in old age – including social security ?

In old age, the pensioner can expect a taxation of 70 – 100% of the pension, depending on the start of the pension. Many (current and prospective) pensioners have not even realised that pensions are now taxable for the most part and will soon be 100% taxable. Irrespective of this, the legislator could also introduce a contribution obligation in the GKV for all income, for example also Rürup pensions, at any time. In this context, the agents’ forecasts often turn out to be a simple fiction based on the “principle of hope”. If the state needs money, it also has the means to get it, especially in the case of Rürup pensions, which have to be reported by the insurers.

Those who have insured themselves against occupational disability by means of a BUZ are allowed to pay tax on the BUZ annuity like normal other income in the event of provision – in contrast to this, a separate insurance against occupational disability (layer 3) would often only have been taxable with the share of earnings.

This disadvantage is also rarely pointed out by the intermediary – but the usually minimal advantage of being able to deduct the BUZ contributions “better”. The “tax-saving gene” of the customer mostly prevented a critical before-and-after tax comparison. Even financial planners at lending institutions have rarely been privy to the tax differences in how clients determine their needs.


Professional risk management: Personal emergency roadmap!

At best, a scenario technique of different legal developments in terms of charges, but also an expert look at the calculation of the insurer can help the customer from negative returns. Even those who pay compulsory contributions to a pension chamber (VK) are not protected from surprises: After the subprime crisis, for example, one chamber wrote “we are not affected”, only to present exorbitant write-downs on “junk securities” that had become worthless in the members’ circular before Christmas.

Pension cuts to less than half for elderly pensioners were the result at another pension fund. One piece of good news is that as early as the 1950s the Federal Court of Justice allowed insurers to terminate non-cancellable contracts with insurers without notice and in full as an exception in the event of a worrying deterioration in the insurer’s economic situation.

Without regular controlling, it is unlikely that one will be able to build up one’s old-age provision anywhere nowadays without worrying, relying blindly on “good names”. However, given periods of 20 to 40 years until the start of the pension and 40 to 80 years until the natural end of the pension payments, any planning for commitment to a contract will find a limit. In nominal and gross terms, one may still be able to count on guaranteed pensions – but what the state will leave of them in net terms and what this will still be worth after perhaps more than 80 years of inflation is completely up in the air.


By Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm


by courtesy of (published in Computers in Crafts 03/2011, pages 5-7)


(published 2/14/2011, under the heading:

What financial advisors often forget to tell their clients)


((published in Network Karriere 04/2011, pages 36-37 under the headline: What financial advisors often forget to tell their clients)


(published in Gunsmith 09/2009, pages 9-10, under the headline: What financial advisors often forget to tell their clients)

and (published in Der niedergelassene Arzt 05/2011, pages 2-3 under the heading:

What financial advisors often don’t tell their clients “Your money isn’t gone, someone else just has it”

and (published in The Tobacco Newspaper No. 8 under the headline: What financial advisers often forget to tell their clients).

and (Published in Infinity Magazine 03/2011, under the headline:

Rürup pension: What financial advisors often forget to tell their clients


and (published in Die Zahnarztwoche 12/2011 under the headline: “Your money is not gone – only someone else has it”) (published in Der BauUnternehmer 03/2011 under the headline: Rürup-Rente: Which unfortunates do not find recognition of their contributions at the tax office?)



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About the author

Dr. Johannes Fiala Dr. Johannes Fiala

Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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