What is a registered pension scheme?

A registered pension scheme is a special kind of pension insurance. In exchange for tax benefits, it follows rules set out by the government on how the investment should behave and how the options to pay out the capital. In Germany, there is the Riester pension scheme, which has a low tax-free allowance and has government contributions per family member. They have a full capital guarantee, which restricts the riester pension from pursuing higher return investments. Another one is the Rurup pension scheme, which is for higher income earners or freelancers, which allows you to invest very flexibly with pre-tax income (gross) income. The government will refund part of your contributions every year in a lump sum. The Rurup does not have government contributions, but it is a tax-deferral scheme on both the profits of investment and the contributions. The retirement income is then taxable at the normal income tax rate when you retire. It’s important to check with our advisors that your contract is a registered pension insurance so that you make sure you realize the benefits of the contract. You can book a review with our advisors in the Horizon65 app.