The EU pensions regulator has published its advice to the European Commission on best practices for national pension tracking systems and the development of a pensions dashboard, recommending additional data collection from pension providers.
The Commission requested the advice in December last year as part of its Capital Markets Union work, and in July EIOPA launched a consultation on its thinking.
EIOPA has described pension tracking systems as a “micro” tool to raise individual citizens’ awareness of expected future retirement income, and the pensions dashboard as a “macro” tool to support policymakers at national and EU level.
In a letter to the Commission, EIOPA said that in general stakeholders welcomed the further exploration of the development of pensions tracking systems and a pensions dashboard but EIOPA members had “some strong concerns on the dashboard in areas such as their powers and resources to make increased data collections”.
With regard to the pensions dashboard, EIOPA’s advice is to develop a visual pension dashboard presenting a complete set of indicators that “allow for enhanced analysis and comparison and are also easy to comprehend”.
In particular, EIOPA is recommending using indicators drawn from the European Commission’s triennial ageing, pension adequacy and fiscal sustainability reports.
However, it said these needed to be complemented with key information on the contribution of privately provided occupational and personal pensions, and recommended that additional pensions data be collected from private pension providers, including non-pension fund providers.
EIOPA said it identified substantial data gaps with key data only being available for half of the supplementary pension plans and products offered in the EU.
Resolving these data gaps was essential to enable Member States to make pensions projection and design suitable policy responses coping with future pressure on public finances or poverty of the senior population, EIOPA said.
The supervisory authority advised a step-by-step approach be taken by using currently available pensions data and enhancing the indicators over time.
“I do not believe that the sole aim of feeding the pension dashboard justifies additional data reporting for IORPs and for others the introduction of a completely new reporting system”
Klaus Stiefermann, managing director of aba and deputy chair of PensionsEurope
In previous feedback to EIOPA, PensionsEurope had said the pension dashboard should rely on data that is already available and clearly report its limitations, and that additional reporting requirements for pension providers should be largely avoided.
Speaking at a Retirement Week event yesterday, Klaus Stiefermann, managing director of German pension fund association aba and deputy chair of PensionsEurope, said the benefits of the data collected needed to be weighted against the associated costs.
“I do not believe that the sole aim of feeding the pension dashboard justifies additional data reporting for IORPs and for others the introduction of a completely new reporting system,” he said.
“What depth does one need for this desired macroeconomic instrument? The pension dashboard should use what is already available in the Member States.”
With regard to the advice on the pension tracking systems, EIOPA said building such a system could take several years and that to facilitate the process for Member States, it had developed a visual roadmap setting out four phases from preparation to launch.
It said Member States were encouraged to connect to the European Tracking Service to offer intra-EU mobile workers access to their accrued pensions entitlements.
Stiefermann said national pension tracking systems could be very effective tools to make people aware of their financial situation in old age and help them make good decisions.
However, he said there were good reasons why pensions policy was the responsibility of Member States, and that this also applied to the decision about what in a national context is considered as pension provision.
“Therefore, Brussels can only make recommendations, the decisions about the most important ‘design parameters’ of a pension tracking system must be left to the Member States.”