Germany's biggest pension system overhaul in over 20 years is set to transfer hundreds of billions of euros in retirement savings to global asset managers, at the expense of insurers. The reforms, effective January, replace guaranteed Riester pensions with accounts modeled on US 401(k) plans. Fees on the standard Altersvorsorgedepot will be capped at 1 per cent, down from up to 4 per cent on existing Riester accounts, favoring low-cost passive index trackers.

"The biggest inflows will ultimately go to the large ETF providers — Black Rock, Vanguard, DWS and Amundi," said Tamaz Georgadze, CEO of Raisin. Incumbent distributors like DWS, Union Investment, and Deka will compete alongside digital brokers such as Trade Republic and Scalable Capital, plus foreign entrants including JPMorgan Chase and Revolut.

Morgan Stanley estimates annual flows of €40bn into capital markets, with Vanguard projecting €150bn within five years. The reforms aim to boost retiree returns and narrow Germany's pension gap. Mandatory lifetime annuities are abolished, allowing flexible withdrawal plans until age 85. Insurers, holding two-thirds of Riester accounts, face significant disruption as the guaranteed system giving way to market-driven investments.