Fundamentally the Riester-Renteis intended solely for the provision of the saver’s own pension. The important exception in the event of the saver’s death, is his partner with whom he was married up until the time of his death. When other relatives inherit the Riester funds, state contributions (a significant sum) need to be paid back to the government. The remainder is taxed although this does not constitute a significant further reduction.

The partner can inherit Riester Funds without having to pay back the state contributions provided these are transferred to their own Riester-Rente. It is by–the-by whether the partner of the deceased already has a Riester-Rente in place or not. When a new one is opened the tranferred scheme can carry on from where it left off.

Provided the Riester-Saver had not entered the so called annuitisation phase (Restverrentungsphase) before he died then the spouse can receive the sum of the saved monies. This phase begins at 58. At this threshold the savings plan switches over to a pension insurance scheme automatically which guarantees the saver a life long income. However, after this point a full inheritance of these monies is not possible.

Should the Riester-Saver die a few years after the onset of the Restverrentungsphase there will hardly be any money for the next of kin. This is because the costs of insuring the pension are spread over the first five years although this depends on the terms and conditions of the policy in question. The Riester saver can even reduce his premiums by stipulating that his spouse receives no monies in the event of his death.

Furthermore the saver can arrange a guaranteed pension period (Rentengarantiezeit). If this stretches to five years then the pension payments will be made to the partner in the event of the saver’s death. However, those who have arranged a clause precluding any such arrangement in the event of their death would be better sorting out a separate life insurance policy.

In conclusion, normally funds from a Riester-Rente would go to partner of the saver in the event of his or her death. However the conditions of the pension insurance policy should always be examined in this regard.