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

A Rürup pension cannot be inherited, given away, sold or lent. If you have debts, you risk creditors seizing the Rürup assets you have saved up before your pension starts. And if the state would have to pay Hartz IV or court cost assistance, it allows him to deny the Rürup assets and to refer the pension saver to the extraordinary termination of his Rürup contract, even before the pension begins, at least down to a pension at welfare assistance level. Those who provide for their old age through pension schemes or voluntary payments into pension insurance are better off.

At best, the insurance customer can have his contract made non-contributory: If supplementary occupational disability insurance has been included in the basic pension, there is a risk of loss of risk protection in the event of occupational disability. Almost always a classic in agent liability, because if you’ve become too ill in the meantime, it’s hard to find an insurer that will provide coverage. If the insurer promises a “BUZ-Retter” as an option for the continuation of the BU provision in the so-called layer 3, the rude awakening can come, because this represents a new conclusion without health examination, but due to new calculation bases the double premium can be due for it, and also the tax deductibility is omitted. In addition, the customer cannot yet be aware of the (new) insurance conditions that will then apply.


Funded pensions often unprofitable for 1 million insured?

Even a savings book is more profitable than a basic pension, critics say. In addition, there are also cases of expected negative returns when acquisition and administrative costs are higher than the guaranteed interest rate. Also, because of the insurer’s cost burden, 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 to 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.


Unhappy find no recognition of their Rürup deposits with tax officials?

Even reputable insurers mistrain their agents, making survivor annuities tax-deductible if their own retirement annuities account for less than 50% of the premium. This is the case if other additional inclusions such as death cover for surviving dependants or also for the 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 pension is paid until the month of death, for example, but

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 pension like normal other income in the case of provision, whereas a separate insurance against occupational disability (layer 3) would often only have been taxable with the share of earnings.


Professional Risk Management: Personal Emergency Roadmap!

At best, a scenario technique of different legal developments in the levies, but also an expert look at the calculation of the insurer can help the customer from negative returns. Even those who pay compulsory contributions into a pension chamber (VK) are not protected from surprises: For example, one VK wrote after the subprime crisis .we are not affected”, only to present exorbitant write-downs on “junk securities” that had become worthless in the meantime in the member circular before Christmas. Pension cuts of more 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 without notice and in full as an exception in the event of a worrying deterioration in the insurer’s economic situation. Nowadays, without regular controlling, one will probably not be able to build up one’s old-age provision anywhere without worries, blindly trusting in “good names”. However, in view of the time 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, there is a limit to any planning when committing to a contract. In nominal and gross terms, one may still be able to count on guaranteed pensions – but what the state will leave 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

www.hm-infinity.de (published in Infinity 03/2011)


www.performance.de (published in Performance 01/2011, pages 42-43)

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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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