Paritarian model key to pension adequacy: AEIP response to EU consultation on supplementary pensions

Paritarian model key to pension adequacy: AEIP response to EU consultation on supplementary pensions

The European Association of Paritarian Institutions (AEIP) has today submitted its response to the European Commission targeted consultation on supplementary pensions. AEIP welcomes the EU agenda to expand funded pension systems across Europe in order to ensure that European workers enjoy adequate income in retirement. We call on the Commission to prioritize strengthening occupational pensions and promoting the paritarian governance model. Jointly managed by social partners and operating on a not-for-profit basis, paritarian pension institutions have consistently proven to be the most effective and socially responsible way to deliver adequate and sustainable retirement income for EU citizens.

In the context of the upcoming review of the IORP II Directive, AEIP emphasizes the need to preserve the Directive’s current minimum harmonization, principle-based approach, and scope, which reflect the diversity of Member States’ pension systems and their social, labour, and tax frameworks. AEIP warns that increased supervisory convergence or the adoption of one-size-fits-all solutions risk undermining the role of social partners, increasing administrative burdens, and ultimately weaken pension adequacy. National competent authorities are best placed to supervise IORPs, given their knowledge of the national legal and social context in which these institutions operate, and their expertise in addressing the specific risks and vulnerabilities of IORPs.

Simone Miotto, Executive Director at AEIP, said:

We very much support the European Commission’s intention to strengthen occupational pensions across the EU to enhance pension adequacy. To achieve this, we believe it is crucial to further promote and support the establishment of paritarian institutions. These institutions embody the European social model, being jointly managed by the social partners and serving not-for-profit purposes.

The next review of the IORP Directive is critical for (paritarian) IORPs. A key issue that should be considered is the enhancement of the proportionality principle across the entire framework. The application of this Directive should always take into account the size, nature, scale, and complexity of IORP’s activities. Without this consideration, excessive governance, transparency, or reporting requirements risk eroding the viability of these institutions, discouraging the establishment of new IORPs, and ultimately failing to support improvements in pension adequacy in the EU.

On the Pan-European Personal Pension Product (PEPP), AEIP believes that strengthening occupational pensions through the further development of the paritarian model of governance is a more effective way of giving Europeans access to funded pensions. Paritarian funds enable wide participations, are not-for-profit and offer risk-sharing mechanisms, making them a more reliable foundation for supplementary retirement income. PEPP can play a role as an individual pension product where occupational systems are absent and should not be adapted for workplace use.

AEIP also welcomes the Commission’s attention to non-legislative initiatives:

• Pension Tracking Systems (PTS) – AEIP calls for further development of national PTS as a key tool to raise citizens’ awareness of their entitlements and to help them make better financial planning decisions for their future. As a partner of the European Tracking Service (ETS) on pensions, AEIP highlights its crucial role in linking national systems, enabling mobile workers to access a consolidated overview of pensions accrued across Member States, and preventing unclaimed rights. Continued EU support is essential to make this a reality.
• Pension Dashboards – AEIP supports dashboards as valuable national policy tools, provided they are grounded in subsidiarity, rely on existing data, and are designed to enhance transparency and informed debate—not to harmonise or rank national systems.
• On auto-enrolment, AEIP recognises its potential in countries with low supplementary pension coverage but stresses that it must not disrupt well-functioning mandatory or quasi-mandatory schemes governed through social dialogue. Social partner involvement remains a core principle for any auto-enrolment design.

We look forward to engaging with the European Commission and the EU co-legislators to further discuss solutions targeted at improving pension adequacy and expanding coverage of occupational pensions.

To read our full response, please see here.