Modern company pensions: Self-service instead of sales pitches

1. The shift in user expectations: From analog to digital

Expectations for financial products have changed fundamentally. Platforms like Trade Republic or Scalable Capital have shown that users today expect digital, transparent solutions – without complicated processes, long waiting times, or opaque cost structures.

What has become the norm in private wealth management is now reaching company pensions and setting new standards:

• Digital: Setup and management entirely via an app
• Transparent: All costs, contributions, and returns visible at any time
• Full control: Users decide for themselves when and how much they save / invest

Employees increasingly expect these standards in company pensions as well.

2. The cost trap: Commissions as a return killer

In the traditional world of company pensions, upfront commissions are widespread. These commissions are often justified as costs for personal advice. The employee bears these costs—directly from their contributions.

How commissions reduce returns

In standard market company pensions, 2.5% of the total contribution amount (i.e., all payments agreed upon at the time of contract conclusion over the term) is typically paid to brokers as a "front-loaded" commission over the first five years. And if contributions are increased later, perhaps through a so-called contribution dynamic, further commission becomes due.

With a 30-year term and a monthly contribution of €200, that’s €1,800 missing in the first few years. In such a company pension, the contract balance in the early years is often lower than the contributions paid in – the contract is "underwater."

The problem: Due to front-loading, sales costs significantly reduce the accumulated assets, especially in the first years of the contract. This sabotages the compound interest effect—the most important lever for long-term saving.

3. Commission-free investing: The majority goes toward retirement provision

Modern company pension providers are consciously breaking with the commission model and focusing on self-service platforms.

The result:

• The majority of contributions go directly into capital investments (minus low ongoing costs)
• Assets build up faster (compound interest effect)
• The final pension payout is significantly higher

4. Investing digitally and independently

Modern company pension platforms allow for a completely digital sign-up process—without lengthy coordination loops or paperwork. What has long been standard at companies like Trade Republic also works for company pensions:

• Employees choose their investment strategy independently (e.g., a globally diversified ETF)
• All information is viewable in the app at any time: contributions, returns, and costs
• Full transparency: No hidden fees, no "sales tricks"

5. Service instead of sales: Support at the touch of a button when needed

Digital doesn't mean being left on your own. Modern company pension products often provide a dedicated support team as well as comprehensive information materials:

• Questions about your plan, the app, or ETF options are answered quickly and digitally.
• No sales pitches, just genuine help with using the service.
• Easy access to knowledge bases, FAQs, and video tutorials.

Personalized information when needed: If an employee feels the digital platform isn't enough, modern providers often offer personalized information about the company pension model upon request. This includes, for example:

• Technical mechanics (e.g., salary sacrifice)
• Subsidies (e.g., the employer subsidy)
• Vesting rules
• Impact of common life events (e.g., leaving the company, parental leave)

The result: Employees get the support they need—without paying for it through commissions.

Bottom line: A better pension through lower costs

Company pensions don't have to be expensive, opaque products. What has long been standard in private retirement planning—self-service via app, transparent costs, and no sales pitches—works just as well for company pensions.

With a commission-free, digital model based on the Trade Republic principle, the majority of contributions go where they belong: into your future pension. Moving away from traditional sales structures isn't the price you pay for lower costs—it’s the key to higher returns and, ultimately, a better pension.