What the annuity factor determines in your Riester contract
The annuity factor states how much monthly pension your insurer pays for every €10,000 of policy value. It is set out in your policy document. The pension is calculated by dividing the policy value by €10,000 and multiplying the result by this factor.
A certified Riester contract guarantees the contributions you have paid in: the provider commits that, at the start of the payout phase, at least the retirement contributions paid in remain available (§ 1(1) sentence 1 no. 3 AltZertG). How much monthly pension results from that capital is decided by the annuity factor.
If the factor falls, the pension falls in the same proportion. The policy value itself remains unchanged.
BGH ruling of 10 December 2025 on the annuity factor clause
On 10 December 2025 the Federal Court of Justice (BGH) ruled on an injunction claim under the UKlaG (IV ZR 34/25). The claimant was an association registered under § 4 UKlaG, suing a life insurer; the lower courts were Stuttgart Regional Court (53 O 214/22) and Stuttgart Higher Regional Court (2 U 143/23).
The court held invalid a clause in the conditions of a unit-linked Riester pension policy that entitles the insurer to reduce the annuity factor when life expectancy has risen sharply or the return on the underlying investments has fallen sharply, without obliging the insurer to raise the factor again once those circumstances later improve. The standard applied was § 308 no. 4 and § 307(1) sentence 1 BGB. Whether § 163 VVG also applies was left open.
Establishing whether the factor was cut in your own contract
Whether your annuity factor has been reduced follows from your own documents. You need the policy document, the annual statements and the insurance conditions. The conditions show under what circumstances the insurer was entitled to change the factor at all.
Comparing the policy document with the annual statement
The policy document states the annuity factor promised when the contract was concluded, usually as an amount per €10,000 of policy value. Compare it with the factor shown in your current annual statement. If the current figure is lower, the factor has been reduced.
Then check the insurance conditions to see whether the adjustment clause obliges the insurer to raise the factor again once circumstances improve. If that obligation is missing, the clause matches the version objected to by the BGH.
Which adjustment clauses the ruling covers
The judgment of 10 December 2025 covers clauses that allow a reduction without obliging the insurer to raise the factor again once circumstances improve. A clause that does contain this obligation was not objected to by the Senate.
Individual policyholders have also taken action on their own. On 8 February 2023 Cologne Regional Court found that the reduction of an agreed annuity factor of €37.34 per €10,000 was not effective and declared the reduction clause invalid (case no. 26 O 12/22). The clause deviated from § 163 VVG to the policyholder’s disadvantage, which § 171 VVG prohibits.
Claims for the guaranteed annuity factor and arrears
If the adjustment clause is invalid, the guaranteed annuity factor promised in the policy document continues to apply unchanged. Two claims follow from this: a declaration of that factor, and payment of the arrears on pensions paid out at too low a rate.
Establishing the original annuity factor
First, we call on the insurer in writing to confirm that the annuity factor originally agreed applies to your contract. If no confirmation follows, a declaratory action follows.
Under § 256(1) ZPO, a claim for a declaration on the existence of a legal relationship may be brought where the claimant has a legal interest in a prompt judicial decision. This is the route the policyholder took in the Cologne proceedings.
Arrears and limitation under §§ 195, 199 BGB
If you are already receiving a pension based on the reduced factor, your claim covers the difference for every month since the reduction. Once the insurer is in default, interest of five percentage points above the base rate is added (§ 288(1) BGB).
The standard limitation period is three years (§ 195 BGB). It begins at the end of the year in which the claim arose and you became aware, or without gross negligence should have become aware, of the facts giving rise to the claim and the identity of the debtor (§ 199(1) BGB). When that knowledge existed must be determined separately for each contract.
Further information
These topics may also be of interest:
- Cancelling a Riester pension
- Cancelling or revoking life insurance
- Reducing private health insurance premium increases
This information does not constitute legal advice in an individual case.
