The Dutch Pensions Federation has softened its position on the proposed European personal pension and now said that a European standard for the third pillar could “contribute to plugging workers’ pension gaps”.

In a letter to the European Commission, however, it argues that Brussels should first conduct a “wider” survey that also considers improving the second pillar.

Last year, responding to a consultation by European supervisor EIOPA, the industry body said it had “many doubts about the umpteenth third-pillar product, which would only benefit the happy few”.

It now believes a European standard would be needed to achieve additional pensions saving and could contribute to investments in the European economy.

“This goes in particular for countries with limited capital-funded pensions,” it said.

The Federation’s take on the European Commission’s proposal is far more supportive than that of the Dutch government, which described a European third-pillar pensions product as “superfluous”.

The industry group, however, emphasised that it would still be better to promote second-pillar pensions due to the benefits of scale and lower costs.

It suggested that the Commission look into the options for additional pensions saving through tax facilitation.

The potential for cross-border pensions should also be taken into account, it said.

The Federation warned, however, that a personal pension must not undermine existing second-pillar systems and said it feared that an opened-up internal market could trigger a “cost-driven race to the bottom” for pensions.

It also highlighted the importance of rules for the benefits phase of a European third-pillar product.