Annuity factor and mortality table: what €100,000 turns into as a pension

In the savings phase, costs and subsidies decide. In the payout phase something else decides: whether the capital is annuitised and which life expectancy the provider assumes. This page explains the annuity factor, the mortality table behind it and the drawdown plan of the Altersvorsorgedepot – without judging.

What the annuity factor is

The annuity factor (Rentenfaktor) states how much monthly pension an insurer pays per €10,000 of contract capital. A guaranteed factor of 27 means €27 per month per €10,000, i.e. €270 from €100,000. Riester annuity insurance usually shows a guaranteed factor (promised at signing) and a current factor (with today's calculation basis, usually higher). Fund and bank savings plans have no factor of their own; for the annuitisation from 85 the remaining capital is handed to an insurer whose factor then applies.

The mortality table behind it

Insurers calculate lifelong annuities with the DAV 2004 R mortality table of the German Actuarial Association. It contains safety margins and assumes, for people who are 40 today, a life expectancy well above 90 depending on birth year – higher than the tables of the Federal Statistical Office, because the insurer bears the risk that customers live longer than expected. Together with a low technical interest rate this produces the low guaranteed factors. Surpluses can raise the actual pension later but are not guaranteed.

Worked example: when is the capital “back”?

The calculation ignores interest and surpluses; it only shows the order of magnitude. With a 30% lump sum taken first, the factors apply to the remaining 70%.

The drawdown plan of the Altersvorsorgedepot

The Altersvorsorgedepot's default is a drawdown plan until at least age 85. The capital stays invested and is spread over the term; the monthly payout depends on capital, term and realised returns – not on a mortality table. With €100,000, start at 67 and 18 years, that is roughly €460 per month without returns and roughly €620 at 3% returns (assumptions, not promises). Whatever is left at death is inherited.

The difference to a lifelong annuity is longevity protection: the drawdown plan ends at 85 or when the capital runs out. Anyone living longer gets nothing more from this contract – unless part was reserved for an annuity from 85. The law allows the combination; providers' details are not yet available.

What this means for the transfer

• Anyone who transfers gives up the guaranteed annuity factor of the Riester contract. Buying an annuity later in the new system happens at the calculation basis valid then.
• Anyone who stays in the Riester insurance has a lifelong but low pension without inheritance of the remaining capital (unless survivor protection was agreed).
• The guaranteed factor is in the policy or available on request. It is the figure that counts when comparing the payout phase – the switch check shows it next to the drawdown plan.

Quick answers

Where do I find the guaranteed annuity factor?

In the policy document or the contract terms; many annual statements do not show it. On request the insurer must disclose it.

Does the mortality table also apply to fund savings plans?

Only at annuitisation from 85: then the provider buys a lifelong annuity with the remaining capital from an insurer that calculates with DAV 2004 R.

Does the annuity factor rise when interest rates rise?

The guaranteed factor does not; it is fixed. The current factor and the surplus pension can change with the calculation basis.

This page provides general information about statutory rules. It is not legal, tax or investment advice and makes no recommendation for any individual contract. For a personal assessment, consumer advice centres (Verbraucherzentralen) or licensed advisers are the right address – where to get advice.