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AEIP answer to the EC consultation on a potential EU personal pension framework

AEIP welcomes the opportunity to provide its feedback on the public consultation on the feasibility of a potential EU policy framework to establish a successful European market for simple, efficient and competitive personal pensions.

AEIP fully supports the goal of delivering sustainable and adequate pensions in the EU. While emphasizing that the 1st pillar remains the largest part of retirement coverage in most Member States, we support the general aim of having multi-pillar pension systems in the EU and the development of a strong EU framework for supplementary pension savings.

AEIP would like to raise the following key remarks:

  • We are pleased that the Commission has clearly made a distinction between 2nd pillar workplace pensions on the one hand, and 3rd pillar personal products on the other hand. AEIP was advocating for clarifying this since EIOPA’s consultations.
  • We believe that the overall aim of this initiative should be to reduce the pension gap, while safeguarding the existing well-functioning pension systems: today, a majority of employees do not have access to supplementary pension savings.
  • In order to reach this goal, we fear that the introduction of a new standardized 3rd pillar product will not be sufficient, but it could improve supplementary retirement savings in those countries where there is no or not a well-developed personal pension system, or there is limited workplace pension coverage.
  • All personal pension products, and not only an EU-wide pension solution, should be safe, transparent and cost-effective.
  • If an EU product (i.e. the PEPP) will be proposed, it should be a true long-term pension product, allowing providers to generate long-term liabilities and incentivizing consumers to save for a long period. A proper consideration of the decumulation phase and of minimum holding period is needed, as these are key features for pension products.
  • Any risk of harmonization towards the bottom must be avoided: any new regulation on private pensions should include a principle-based framework legislation that allows Member States to apply additional rules aimed at increasing the duty of care towards consumers.
  • New rules cannot by any means offer an opting-out nor contracting-out opportunity to the national 1st and 2nd pillar pensions.
  • All in all, we believe that the EU Institutions should focus their efforts in further promoting and spreading collective occupational pensions that, compared to 3rd pillar products based on a voluntary individual membership and sold on a retail basis, have clear advantages.
  • We plead for a broader pension debate in Europe that takes into consideration the different pension pillars through a holistic view of old-age income.

AEIP is ready to provide its expertise and input to such a debate.

Read our answer at this link.

Download the press release at this link.