Scandal-hit insurer overcharged retirement savers

Scandal-hit insurer overcharged retirement savers
Photo: DPA
Already grappling with a now notorious sex-party scandal, the Hamburg-Mannheimer subsidiary of German insurance company Ergo reportedly overcharged 70,000 customers some €160 million (€234 million) for state-subsidized pension saving schemes.

This time the controversy revolves around so-called Riester-Rente accounts, pension schemes in which participants receive tax breaks and subsidies from the government for saving for their retirements.

According to the business daily Handelsblatt, at least 70,000 customers who signed up in 2005 and 2006 for Hamburg-Mannheimer’s Kaiser-Rente programme – which were part of the company’s Riester-Rente offerings – were charged markedly higher administrative fees than outlined in contracts.

The company may have wrongly raked in millions due to the widespread overcharging, the newspaper reported.

A former company representative told Handelsblatt that “the administrative costs differed by four percentage points from the costs that the customer had been shown in the applications.”

That means an average customer earned €2,300 less than would have been expected from the pension schemes, the former employee told the newspaper.

Ergo spokeswoman Alexandra Klemme said any overcharging were isolated cases that had been caused by tariff changes around 2004 and 2005. “The costs have been adjusted to the actual requirements,” she said.

The Local/mdm

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