A guide to the digital pension overview

Welcome to the digital age of pensions

Since 30 June 2023, the digital pension overview, which was initiated by the German Pension Insurance with funding provided by federal government, has been in its public pilot phase for test and evaluation purposes. ‘For life insurance providers operating in German, the development of the digital pension overview is part of an important, long-held ambition to provide greater transparency in the pension space,’ states Jörg Asmussen, Chief Executive of the German Insurance Association (GDV). This is a call to action for all insurance providers. Imagine all the time and effort your clients have to spend planning their pensions, having to wade through a pile of documents that have been tucked away in a drawer for years. Sound like a hassle, right? It does not have to stay that way. The introduction of the digital pension overview opens up new opportunities, not just for the end customer but also for the insurance industry as a whole.

In this blog post, I would like to describe what the digital pension overview is, why the platform represents an important step towards greater transparent in retirement provisions and what changes insurance companies have to make to adapt.

What is the digital pension overview?

The digital pension overview is an online platform under the auspices of Deutsche Rentenversicherung, Germany’s national pension scheme, that provides a complete overview of all pension entitlements a person has accumulated over the course of their life. This covers both statutory as well as private and company pension schemes, meaning that you no longer have to consult multiple sources to get a clear picture of your future pension. The service is of course free of charge. You will however continue to receive the annual notifications from the statutory pension insurance and other pension scheme providers by post. The digital pension overview serves as a solid foundation for planning your personal pension and for in-depth consultations with experts. Beyond that, it is also possible to export the data from the digital platform as a CSV file for further use.

Why is the digital pension overview so important?

For experts and the public alike, transparency regarding retirement provisions is of critical importance. Until now, it had been difficult to get a clear overview of one’s various pension entitlements. It required that you search through a number of documents or seek professional advice. However, this does not mean that personal consultations no longer have a role play, though the focus may shift toward calculating the person’s pension gap and identifying measures to close this gap.

When the digital pension overview was first launched, information was available from the statutory pension insurance fund, the federal and state government employees’ retirement fund (Versorgungsanstalt des Bundes und der Länder) and Union Invest. Since then, the list has grown to include just five other providers (as of September 2023).

This also reveals a major weak point of the digital pension overview. Currently, only a small handful of companies that provide private pension products are on board. More than a hundred life insurance companies and occupational pension scheme providers are not part of the current test phase, meaning it is not yet possible to get a full overview of your retirement provisions and calculate any potential gap in your pension.

How can I register for the digital pension overview?

The digital pension overview can be accessed via a web portalwhere you can log in with your electronic identity card (eID).

This reveals yet another weakness. If you want to use your national identity card, the online ID function must be enabled and you will need to know your six-digit PIN. In the latter case, you need the letter containing your PIN. If you have misplaced it as I have, you have to request that a letter be sent to your main residence with information on how to reset your PIN.

Once you have cleared this first hurdle, the next one awaits you. To register, you need an NFC-enabled smartphone or tablet (or a computer with a card reader) and the latest version of AusweisApp2. Follow the instructions in the app and enter your PIN. Now all that is left is to do is type in the tax ID number in the Deutsche Rentenversicherung service.

The next step is to submit a new request for information about the current status of your pension entitlements. Here, a distinction is made between a request from all providers or only from selected ones. All information on the requested pension components should be available after five days at the latest. In my test, the data from the statutory pension scheme was at least available right away.

The information I was able to access on my existing pension entitlements is well structured. In addition to the regular pension start date, the following is also shown:

Unfortunately, your average person would only able to compare and contrast the information from the statutory pension fund and private and company pension schemes to a limited extent. Therefore, you should still schedule a personal consultation with a pension expert.

My recommendations for pension insurance companies and retirement plan holders

In today’s digital world, it is more important than ever to have control over your finances and, more importantly, your pension plan. The digital pension overview is a great way to get the process started. We recommend that everyone take a closer look at their pension plan early on and take full advantage of the opportunities offered by this digital platform since employees in Germany receive annual notifications with information about the status of their current pension entitlements. To obtain a full overview of your pension provisions, you will need to collect all the letters you received from Deutsche Rentenversicherung and other pension providers and parse out the relevant information in a targeted manner. However, it can be a real challenge to keep track of all the status notifications, which are often sent by different providers. This is where the digital pension overview comes into play.

During the test phase which is set to last until the end of 2023, Deutsche Rentenversicherung will be evaluating proposed improvements and testing them out. In the future, the digital pension overview will be adding new functions, providers, as well as making more information available. In addition to information on your statutory pension, data from occupational pension schemes and pension funds will also be integrated. The platform will add subsidised private pension schemes such as Riester and basic pensions to the pension overview.

Especially when it comes to sensitive personal data, data protection is paramount. This explains why the identity check and process to register for your digital pension overview involves so many steps. If you do not meet the requirements I previously described or do not manage to start the process, you will not be able to access your digital pension overview. This is where other third-party identity verification solutions could be used to enable even more citizens to view their digital pension overview.

Insurance providers have so far been under no obligation to connect to the system. This has been purely voluntary. While the law does include an accompanying mandate, no deadline has been set as of yet. Once the obligation to connect to the systems takes effect, it will apply to all companies that provide pension products and are already obliged to regularly send information on retirement provisions pursuant to sentences 3 and 4 of Section 7(1) of the Pension Transfer Act (RentÜG). ‘There is still a lot of work ahead for everyone involved. Life insurance companies are hard at work setting up the technical link to the portal,’ says Asmussen. The success of the digital pension overview is now largely in the hands of these companies. Being part of a government-funded initiative has the potential to enhance the image of an insurance provider as a responsible, customer-oriented company. The digital pension overview also gives insurance companies deeper insights into the requirements and behaviour of their customers. They can use this information to provide personalised financial and insurance products that are better suited to their customers’ individual needs. adesso is a professional partner for insurance providers when it comes to preparing and storing contract data and supplying this information to the digital pension overview.

You can find more exciting topics from the adesso world in our blog articles published so far.

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