The Retirement Investment Account (AVD) Is Coming – and With It a Historic Opportunity

The Retirement Investment Account Has Been Set in Motion

With the reform of the Retirement Savings Certification Act (AltZertG)¹ passed on 1 June 2026, the legislature is creating the new Retirement Investment Account (AVD), marking a fresh start for state-subsidised private retirement provision in Germany.

The old Riester system – widely regarded as too complex, too expensive, and too inflexible – is being replaced by a modern product: one featuring a state bonus, a clear cost cap of a maximum of 1.0% p.a., and a statutory right to switch providers. The starting gun fires on 1 January 2027.

From this date, financial institutions will be able to offer the new Retirement Investment Account (AVD). The “Riester pension” will thus become history – no new contracts under the Riester model will be available.

Opportunities for a Secure Retirement

What the legislature has couched in sober statutory language represents a genuine improvement for millions of people across Germany.

Anyone who has been locked into an expensive or low-yielding Riester contract for years will in future be able to switch with ease – without losing their state subsidy. Young parents will be able to open a subsidised account from the moment their child is born, with the state covering the bonus and the compound interest effect taking hold from the very outset. And for the first time, all savers will know exactly what their retirement savings product actually costs: the law is the law, and no provider may charge more than 1.0% p.a.

What Does This Mean for Financial Institutions?

For banks and insurers, 1 January 2027 is not a distant deadline – it is a strategic turning point. Approximately 16 million existing Riester contracts, €200 billion of tied-up capital in the switching pool, and 10 million people without existing subsidised retirement provision paint a picture of considerable market potential. BZSt certification, a comparison platform API, and the right to switch providers will all become mandatory.

The potential is significant: financial institutions can offer a product that competes with classic custody account solutions whilst benefiting from a state subsidy framework.

However, in-house developments typically require more than twelve months – any institution that does not begin with a robust analysis today risks not being market-ready by the deadline.

This is precisely where msg comes in. As market leader in subsidy administration and a comprehensive full-service provider, we deliver strategic consultancy, certified software, and operational management from a single source. With the AVD Quick-Check, our consultants and retirement savings experts analyse an institution’s starting position in just two weeks across all relevant dimensions – regulation, technology, product, sales, and organisation – and deliver a prioritised implementation roadmap.

With over 20 years of experience in subsidy administration and a well-established team of consultants, technology specialists, and operations experts, we are the partner that financial institutions need for this transformation.