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

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

Cécile Henrotte

07/11/2016

Position Papers

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 1^st 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 2^nd pillar workplace pensions on the one hand, and 3^rd 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 3^rd 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 1^st and 2^nd 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 3^rd 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.