ERGO´s new basic pension - government subsidies with either guaranteed minimum pension or additional return potential

As of July 2019, ERGO Vorsorge is offering new products in a new old-age provision scheme. In the case of ERGO´s Basic Pension, customers may choose from two alternatives, whereby the ERGO Basic Pension Index combines government subsidies with a 100-percent premium guarantee plus a guaranteed minimum pension. ERGO´s Basic Pension Balance offers the same tax benefits coupled with maximum investment flexibility and consequently added return potential. The accumulation phase adjusts to changing personal circumstances. This is of particular benefit to those who are self-employed.

Government subsidies in the form of attractive tax benefits and possibilities to individually structure premium payments, coverage options and duration are the key features of both of the new ERGO Basic Pensions. Even in times of low interest rates and with monthly premiums starting from as little as 25 euros, it is therefore possible to build up a reliable provision for old age.

"Both the ERGO Basic Pension Index and the ERGO Basic Pension Balance combine the advantages of government subsidies with flexibility in terms of premium payments, as well optional coverage for occupational disability," explains Michael Fauser, Chief Executive Officer at ERGO Vorsorge Lebensversicherung AG. "This rounds off our range of personal pension plans and offers our customers yet another attractive solution for old-age provisions and coverage for their working capacity." Both tariffs have been awarded the highest "FFF+" grade by the prestigious rating company Franke & Bornberg.

It is essential that more people also make personal provision for financial independence during old age and for possible changes or breaks during their career, continues Michael Fauser. "In this regard, our advanced products provide optimal support since they can also be flexibly adjusted to changing personal circumstances."

ERGO Basic Pension Index and ERGO Basic Pension Balance
The ERGO Basic Pension Index offers security-oriented customers a guaranteed minimum pension in the form of a classic investment with index participation. If offers a 100-percent premium guarantee so that at least the premiums already paid are available as of the agreed commencement of the disposition phase. In the case of this product, customers have a choice between reinvesting the returns on their savings deposits in an index participation scheme or having the annual bonus credited to their balance.

The ERGO Basic Pension Balance offers an alternative for more specifically yield-oriented customers, which is unique in the marketplace. Even at the time of investing their savings contributions, they may choose to divide these at will between a fund investment and a classic investment in guaranteed assets with index participation. Such allocation is flexible and may be altered on monthly basis. In the case of fund investments, customers can choose from some sixty funds operated by well-known providers, both actively-managed funds and also ETFs. Furthermore, customers may opt for an ERGO Asset Management Fund which suits their risk and opportunity profile.

The pension adjusts to one´s life, not vice versa
ERGO´s Basic Pension also offers flexibility in terms of premium payments. Customers may choose between regular monthly premiums or one-off payments, while premiums can be increased or reduced as required. Premium pauses are also possible for up to twenty-four months and, in the case of parental leave, even for as long as thirty-six months. Moreover, customers also profit from the possibility of making additional payments to, for instance, optimise their tax benefits at year-end.

The pension factor guaranteed at the outset remains valid for the entire term and cannot be adjusted downwards. This also applies in the event of increasing the monthly premium or making additional payments. By way of the "Pension Factor Plus" option, the guaranteed pension factor may, as a provident measure, even be raised by up to a further twenty percent at the time the policy commences.

In 2019, eighty-eight percent of the insurance premiums can be offset against tax, this deductible share increasing by a further two percent each year. As from 2025, the full premium will then become tax-deductible.

In the worst case, surviving dependents may also draw benefits from the ERGO Basic Pension. The ERGO Basic Pension is protected against access on the part of the Employment Office and creditors. During the accumulation phase, the Basic Pension is secured for the purposes of Hartz IV unemployment benefits, as well as in the case of insolvency on the part of a business operator.

As a result, ERGO Vorsorge Lebensversicherung AG offers extremely attractive products in the basic pension sector and was recently recognised by ASSEKURATA for its very high level of financial strength.