What's in the Altersvorsorgereformgesetz? The law explained

Tilman Freyenhagen

Published on 24 July 2026 · Managing Director & Partner, Alsterspree Verlag GmbH

The text and promulgation of the law: the formal basis of the AVRG

The Altersvorsorgereformgesetz (AVRG) forms the legal foundation for the comprehensive overhaul of subsidised private retirement provision in Germany. The law was signed on 26 May 2026 and published in the Federal Law Gazette on 29 May 2026, under the official citation BGBl. 2026 I No. 156. Drafted by the Federal Ministry of Finance (BMF) in the lead, the AVRG phases out the existing Riester system step by step and anchors the new Altersvorsorgedepot in the statutory framework.

Key dates of the legislative process and publication

• Signing and promulgation: Signed on 26.05.2026 and officially published in the Federal Law Gazette I 2026 No. 156 on 29.05.2026.
• Legislative process: After the BMF's draft bill was published in December 2025, readings followed in the Bundestag, with the Bundesrat giving its final approval in May 2026.
• Anchored in the statute book: The key requirements for product criteria and disclosure duties are set out in the newly worded § 7d AltZertG.
• Aim of cutting red tape: dismantling complex administrative structures, transparency on effective costs, and enabling high-return investment forms without a mandatory guarantee.

The aim of the legislative initiative is to fundamentally modernise private retirement provision by cutting bureaucratic hurdles and introducing transparent standards. By clearly separating certification, tax subsidy and product design in law, the act creates a reliable framework that lets you compare your private retirement provision transparently and plan for it with confidence in the future.

What is in the Altersvorsorgereformgesetz?

The article structure: how the reform law is organised

Legally speaking, the Altersvorsorgereformgesetz (AVRG) is structured as what's known as an omnibus act. This means lawmakers did not create an isolated piece of legislation by publishing it in the Federal Law Gazette, but instead amended a whole set of existing individual laws at the same time. This legislative technique ensures that subsidy law, tax treatment and the supervisory rules for financial-service providers mesh systematically from the reform's start on 1 January 2027.

The legal structure of the omnibus act in detail

In terms of content, the law rests on two main pillars: tax law for savers and product law for providers. In the Income Tax Act (EStG), lawmakers set out the exact mechanics of the state allowances, the Günstigerprüfung (the automatic check on whether the allowance or the tax deduction is more favourable), and the rules on deferred taxation in old age. In parallel, the Altersvorsorge-Zertifizierungsgesetz (AltZertG) prescribes the criteria an account or investment product must meet to be certified as an eligible Altersvorsorgedepot.

For consumers and advisers, this clear division offers a decisive advantage: anyone wanting to assess tax effects finds the answers in the EStG. Anyone wanting to check fee structures or permitted asset classes such as ETFs, on the other hand, looks up the provisions of the AltZertG. We recommend always distinguishing between the tax level and the product-specific requirement criteria when analysing the details of the reform.

Changes to the Income Tax Act: the logic of the tax subsidy

The Income Tax Act (EStG) forms the legal foundation for the state subsidy of private retirement provision. The law fundamentally modernises the tax rules in the EStG to integrate the new Altersvorsorgedepot into German tax law. The changes mainly concern how the Sonderausgabenabzug (deduction as a special expense) links up with the allowance-based subsidy, and how the relevant sections of the EStG are adapted to return-oriented asset classes without a contribution guarantee.

§ 10a EStG and the redesign of the allowance provisions

The revision of § 10a EStG is the central interface. While the previous Riester regime was tied to complex own-contribution calculations, lawmakers simplify how retirement contributions can be claimed for tax purposes. As part of the annual income tax return, the tax office continues to carry out the Günstigerprüfung automatically. If the individual tax saving exceeds the Sonderausgabenabzug, the difference is credited as a tax refund. In addition, the newly worded allowance provisions from § 79 EStG onward define the requirements for receiving the state subsidy.

• Accumulation phase: All price gains, dividends and interest income stay tax-free within the Altersvorsorgedepot. No annual capital gains tax (Abgeltungsteuer) or Vorabpauschale (advance lump-sum tax) applies.
• Payout phase: All benefit payments are subject to deferred taxation in old age under § 22 Nr. 5 EStG, at the saver's personal income tax rate.
• Sonderausgabenabzug: Own contributions can be claimed as a tax-reducing special expense up to the statutory maximum amount, provided this is advantageous for the taxpayer.

By keeping deferred taxation, the tried-and-tested principle stays in place: during periods of high earned income, taxpayers benefit from noticeable relief through the Sonderausgabenabzug. In retirement, by contrast, the pension or drawdown plan is taxed at what is usually a lower rate. This statutory framework ensures that capital-market-based accounts receive tax support just as targeted as classic insurance products.

The newly worded AltZertG: product rules and disclosure requirements

The Altersvorsorgeverträge-Zertifizierungsgesetz (AltZertG) forms the regulatory basis for which retirement products receive the state subsidy. The reform overhauled the act comprehensively, so that alongside the classic insurance products with contribution guarantees, return-oriented account models are now also anchored with legal certainty. At the centre of this are clear quality and cost requirements for every state-subsidised Altersvorsorgedepot.

Certification criteria and permitted asset classes

To qualify as a subsidised Altersvorsorgedepot, the law lays down binding product rules. To ensure transparency and investor protection, providers must have their products reviewed by the relevant certification body. Among other things, the rules require:

• A closed positive list: The invested capital may only go into legally approved assets, such as broadly diversified ETFs and investment funds, to exclude highly speculative financial instruments.
• Free choice on contribution guarantees: Contracts can be structured entirely without a contribution guarantee, or with flexible guarantee levels, to capture higher return potential on the capital markets.
• A cost cap on the Standarddepot: If a provider offers the state-mandated default product, the annual reduction in return caused by costs (the effective costs) may amount to no more than 1.0 percent.

Special disclosure duties under § 7d AltZertG

A central focus of the new rules is expanded disclosure duties that strengthen consumer protection through stricter disclosure requirements. Product providers are required to inform contract partners, clearly and comprehensibly, about all fee structures, administrative costs and switching conditions before a contract declaration is made. These disclosure rules make it easier for you to compare offers across providers and make an informed decision for your private retirement provision.

Entry into force and transitional periods: when which provisions apply

The Altersvorsorgereformgesetz does not take full effect on a single date, but follows a three-stage implementation logic. After its official promulgation in the Federal Law Gazette on 29 May 2026, the legal groundwork for providers and certification bodies was laid first, before the actual product offering is unlocked for savers.

Through this timeline, lawmakers ensure that financial institutions have enough lead time to develop compliant account models. For consumers, the date of 1 January 2027 marks the actual start of active use. How the launch of the Altersvorsorgedepot plays out in practice therefore depends heavily on how quickly product providers complete their certifications under the AltZertG requirements.

Investors with existing Riester policies don't need to make any rushed decisions on the first key date. The law provides sufficiently long transitional periods to leave existing contracts dormant, continue them contribution-free, or transfer them gradually into an eligible account. The reform's key provisions secure grandfathering, so existing guarantee claims are kept in full if you stay in your old contract.

Certification and oversight: the role of the certification body and BaFin

For an investment or retirement product to receive the state subsidy, it goes through an official review process before it can be marketed. The Altersvorsorgeverträge-Zertifizierungsgesetz (AltZertG) sets out precisely how contracts are to be classified and certified for a subsidised Altersvorsorgedepot. Certification officially confirms that the contract terms meet the statutory requirements, but it does not represent any assessment of the product's economic return.

The certification body's procedure and official duties

The certification body within the Bundeszentralamt für Steuern (BZSt, the Federal Central Tax Office) reviews compliance with the statutory criteria. Providers are required to report any changes to contract terms without delay and to pay the applicable processing fees.

• Certification body (BZSt): Issues the certificate after reviewing the statutory minimum requirements under the AltZertG.
• Reporting duties: The provider must report tariff changes or amendments to the contract content.
• Financial supervision (BaFin): Regulatory oversight of providers regarding solvency and risk management.
• Disclosure requirements: Enforcement of the statutory disclosure duties toward savers under § 7d AltZertG.

The interplay between the certification body and BaFin guarantees a legally vetted framework for investors. We recommend that you always check for a valid certification number before concluding a contract, to secure your entitlement to the state subsidy.

The Standarddepot and cost ceilings: the statutory protection mechanisms

The law enshrines specific protection mechanisms to give investors a transparent, low-cost entry point into subsidised retirement provision. The centrepiece of these consumer-protection provisions is the statutorily regulated Standarddepot (the statutory default account). Thanks to its reduced complexity, it is meant to serve people interested in retirement provision who don't want to make investment decisions themselves^[1]. Savers thus get a structured retirement solution without a complex product selection process.

Statutory parameters: cost cap, positive list and default settings

To specifically counter the weaknesses of earlier Riester-Verträge, such as opaque cost structures and high set-up fees, the legislation establishes three central protective rules for the standard model:

• Effective costs capped at 1.0 percent: For standard-product contracts, the average annual reduction in return caused by product, account and administration costs is capped by law at a maximum of 1.0 percent. This binding ceiling protects your savings from an excessive fee burden.
• A statutory positive list of permitted assets: The reform law contains a closed positive list setting out which asset classes are approved for the Altersvorsorgedepot. The focus is on broadly diversified financial instruments such as equity funds and ETFs.
• A standardised default option: With the standard product, individual selection decisions are only needed if investors actively want to deviate from the statutory default settings.

These rules are supplemented by expanded disclosure duties under § 7d AltZertG, which require providers to disclose effective costs and product parameters before a contract is concluded. This lets lawmakers ensure that return potential on the capital markets isn't eaten up by high margins, but instead benefits savers' wealth-building directly.

Finding your way through the paragraph jungle: how consumers and advisers use the law

Legal texts do offer legally binding clarity, but their technical legal language is often hard for consumers to access. Understanding the statutory text is nonetheless the fundamental basis for correctly assessing the legal entitlements to allowances and tax-free amounts under the new Altersvorsorgedepot. To translate this paragraph jungle into plain language, our knowledge section prepares the complex requirements of the Altersvorsorgereformgesetz for investors and advisers in a source-based, structured way.

Statutory rules versus contractual product terms

For an informed decision, it's crucial to strictly distinguish between the statutory framework and the individual product terms set by financial-service providers. While lawmakers set the regulatory framework and the state allowance structure, providers determine the specific design of the contracts.

• Statutory requirements: Govern state allowances, maximum limits for special expenses, the positive list of permitted asset classes, and disclosure duties under § 7d AltZertG.
• Providers' product terms: Determine the specific account fees, order costs, the selection of ETFs on offer, and the functional design of the user interfaces.
• Independent orientation: Enables a clean separation of state subsidy from commercial product costs, for a transparent market comparison.

Whether choosing an account independently or going the route of personal advice suits you depends on your individual prior knowledge and preferences. A criteria-based provider comparison helps self-deciders objectively weigh up fee structures. In addition, an independent advice service supports savers who prefer individual guidance in fine-tuning their personal retirement strategy.