Transferring Riester into the AVD: process & transfer value

Tilman Freyenhagen

Published on 5 August 2026 · Updated on 7 August 2026 · Managing Director & Partner, Alsterspree Verlag GmbH

The basic principle of the transfer: grandfathering and tax

From 1 January 2027, transferring an existing Riester contract into the new Altersvorsorgedepot is a subsidy-neutral change of system within subsidised private retirement provision, not a termination that triggers repayment of allowances and tax benefits^[1]. All the state Riester allowances accrued during the accumulation phase, as well as the tax benefits granted via the Sonderausgabenabzug (deduction as a special expense), remain intact with a properly executed transfer. The capital saved so far, including the state allowances, is transferred into the new contract, which is then subject to the new contract terms and the new subsidy^[2].

For savers wanting to switch, this creates a legally secure bridge between the two product systems. Instead of dissolving the old contract and repaying all the subsidy money received, the receiving provider arranges a direct capital transfer. No income tax falls due during the transfer phase, since the retirement assets stay continuously tied up within the certified subsidy system.

Through this legal structure, the legislature ensures that savers can switch from cost-intensive or low-return old Riester contracts into higher-return, return-oriented accounts without tax disadvantages.

The transfer value: why only the pure cash value is moved

When you switch from a Riester-Rente (Germany's existing subsidised private pension) to the Altersvorsorgedepot, the cash value of the contract's assets is transferred: the current provider transfers the balance directly to the new provider on the transfer date, so the money moves from contract to contract, not to the saver personally^[3]. Existing fund units, securities, or insurance entitlements are therefore not booked into the new account as holdings; instead, the outgoing provider liquidates the positions on the transfer date and transfers the cash amount.

The calculation of the so-called transfer value is done precisely as of the transfer date, following actuarial and contractual principles. It represents the reserve capital actually available and often differs from the pure nominal value of the contributions paid in.

• Own contributions: the sum of all own contributions the saver has paid in up to the switch date.
• State allowances: all Grundzulage and Kinderzulage payments credited by the Zentrale Zulagenstelle für Altersvermögen (the central allowance office for retirement savings, ZFA).
• Performance and returns: capital gains, interest, and dividends achieved, minus fund costs incurred.
• Contractual cost deductions: deduction of set-up and distribution costs not yet paid off, as well as the old provider's contractual administration costs.

For savers, the pure cash-value transfer means that market positions are temporarily sold at the point of switching. In the new Altersvorsorgedepot, this cash value is then reinvested according to the chosen investment strategy into exchange-traded index funds (ETFs) or other approved asset classes.

Switching costs and fees: how the 150-euro cap works

As part of the reform, the legislature has set clear upper limits on switching costs for a provider switch, to protect consumers' willingness to switch and avoid double charges. The receiving provider may charge a one-off administrative fee of a maximum of 150 euros for setting up and administering the capital transfer^[1]. Set-up and distribution costs must also be spread over the entire contract term.

Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Statutory limits also apply to the outgoing provider. From a contract term of five years, the outgoing provider must in future allow the switch free of charge; before that, it may charge costs of up to 150 euros^[4].

This fee cap ensures that the switch isn't eroded by exorbitant cancellation fees or double distribution commissions, so the saved assets are preserved as fully as possible.

Deadlines and the timeline of a provider switch

A transfer of Riester balances into an Altersvorsorgedepot is possible at the earliest with the official start of the new subsidy system on 1 January 2027^[5]. When carrying it out, savers who have decided to switch should observe the notice periods that apply to the old contract, which, depending on the provider and contract type, usually range from one to three months to the end of a quarter.

During the physical transfer process, a so-called out-of-market risk arises. Because the old provider liquidates the existing securities and transfers the balance as a cash amount to the receiving bank, a few business days typically pass between the sale and the reinvestment in the new account. During this time, the capital does not participate in equity-market price movements.

• Preparation phase: reviewing your current Riester certificate under § 92 EStG and checking the contractual notice period.
• Placing the order: opening the Altersvorsorgedepot with the receiving provider, including the transfer order.
• Transfer phase: the new provider requests the balance; the old provider sells the positions and transfers the money.
• Reinvestment phase: the transfer value is credited in the Altersvorsorgedepot and the chosen ETFs are bought automatically.

Careful timing ensures the capital transfer runs smoothly and keeps time out of the market to a minimum.

Step-by-step guide: the concrete mechanics

The practical provider switch follows a structured process. Switching from an existing Riester contract into the new subsidy system is possible without harming your subsidy status, and without previous allowances having to be repaid^[6]. In practice, the transfer order is usually submitted through the receiving account provider, who organises the handling with the old provider.

1. Determine the contract value: request the current statement from your existing Riester provider to establish the exact guarantee and transfer value.
2. Choose the new account: select a certified Altersvorsorgedepot provider with a suitable ETF structure and a low cost ratio.
3. Submit the transfer order: fill out the capital transfer form with the new provider, giving the old Riester contract number.
4. Wait for automatic processing: the new provider arranges the collection of the balance and updates the subsidy records with the ZFA.
5. Check the investment in the new account: verify the credit and that the money is reinvested on time in the new securities account.

Transferring power of attorney to the new account provider guarantees that your subsidy status is maintained continuously and that no deadlines are missed.

Checklist before switching: calculate and decide

Before finally initiating a transfer, Riester savers should thoroughly analyse their personal provision situation. A switch is especially worthwhile when the remaining term to retirement is long enough to make full use of the higher-return potential of ETFs in the Altersvorsorgedepot.

• Check the remaining term: is there an accumulation phase of at least 10 to 15 years left until retirement?
• Compare the costs: are the ongoing product costs of the new account clearly below the fees of the old Riester contract?
• Weigh up your need for a guarantee: is giving up the contribution guarantee in favour of higher return potential personally acceptable to you?
• Note the subsidy rules: after the switch, the new contract terms and the new tax subsidy apply to the transferred balance.

We at Vorsorgedepot-Lotse offer you transparent guidance to objectively assess whether a switch makes mathematical sense. Through our knowledge section, we provide detailed expert guides. Use our subsidy calculator to calculate precisely what the state subsidy means for your personal situation, and compare suitable account providers neutrally with our provider comparison. If you'd prefer an individual, human expert assessment, our independent advice service puts you in direct contact with qualified fee-based advisers and financial experts.