The European Commission has launched a consultation on a potential EU framework for personal pensions, which builds on previous consultations by it and the European Insurance and Occupational Pensions Authority (EIOPA) but has broader scope.

The consultation is public and aimed at identifying potential obstacles to the take-up of third-pillar pension products. 

It is part of the Commission’s Capital Markets Union (CMU) project, which aims to develop the capital markets in the European Union to boost economic growth, in particular by freeing up financing for small and medium-sized enterprises (SMEs).

“The consultation,” it said, “will enable the Commission to assess what can be done at EU level to support a wider choice of personal pensions competing across borders.

“As key players in capital markets, increasing investment in personal pensions is one of the priorities of the Capital Markets Union. They offer the potential to inject more savings into capital markets and channel additional financing to productive investments.”

The Commission said the consultation would help it analyse the case for an EU personal pension framework.

It is the latest step taken by the Commission in relation to developing private pensions in the EU, with EIOPA drafted in to provide advice.

The Commission noted that its recent consultation built on previous consultations by it and EIOPA “but increases their scope”.

In its advice to the Commission, EIOPA favoured a pan-European personal pension product (PEPP) under a so-called 2nd regime, complementing existing private pension products and for voluntary adoption by providers.

It stuck by this in its recent, final advice to the Commission.

This idea, however, is only one of the options the Commission includes in its consultation, which it said could range from “self-regulatory approaches (cooperation among stakeholders) to more comprehensive EU intervention (harmonising at EU level the national personal pension regimes)”.

It floats four possible approaches on that spectrum, one of which is a European personal pension account akin to the Individual Retirement Account (IRA) in the US.

Margot Jilet, policy adviser at PensionsEurope, said this looked like a new option the Commission was considering.

“They haven’t skewed the consultation toward any one approach,” she told IPE. “That’s in line with what they previously indicated – that they would adopt a broad consultation.”

Indeed, the Commission said it aimed to build on EIOPA’s advice and “widen the range of possible options and stakeholders consulted”.

The Commission’s consultation on private pensions was expected to be published in early July but is said to have been delayed as a result of the Brexit-spurred resignation of the UK’s commissioner, Jonathan Hill, in charge of the financial stability, financial services and CMU brief.

Latvia’s Valdis Dombrovskis has succeeded him.

Speaking at the PensionsEurope conference in Brussels on 23 June – the day of the UK referendum – Hill told delegates the Commission would be launching a consultation on personal pensions before the summer break, and that a feasibility study was already underway.

He said a public hearing would be held in October; it is now said this could be delayed.

The consultation closes on 31 October.