The leader of the European pensions lobby group has said that as economies are changed by the coronavirus pandemic, there will be even more need for funded private pension provision than there is now.
Speaking at the IPE Summer Pensions Congress 2020, Matti Leppäla, chief executive officer of PensionsEurope, said: “What is certain is the debt levels of members states are growing tremendously, and the problems that the members states have already had with changing demographics and being able to deal with public pensions, and social security – that’s even more difficult going forward.
“So there is even more need for funded private pensions, whether it’s workplace or personal pensions for different people in different countries in different ways,” he said in an online panel session in which pension fund leaders discussed future agendas in the sector.
“What this crisis means is that many people need to save for themselves in one way or another more than they ever did before,” Leppäla said.
Assessing the response of European supervisors as well as the European Commission to the onset of the COVID-19 crisis this year, he said their first reaction had been very good.
“I think it was very good that for pension funds EIOPA was recommending the same relaxation of reporting requirements as they had some for insurance companies, and that was very helpful,” Leppäla said.
Though the situation had now improved in the financial markets and the pensions sector was resilient at the moment, Leppäla said concerns about the real economy and financial markets were growing.
Governments in EU states had put very different types of measure in place to ameliorate their local economic situation, he said, with some taking money out of their pension funds to be able to manage the unemployment crisis and to make ends meet.
“Which is of course understandable but for pension funds that’s not a good option – almost a last resort,” he said.
“I think the worst thing would be to nationalise pension funds, but in some countries nothing like that happens or is even possible,” he added.
Looking ahead, Leppäla said it was quite obvious there would be long-term impacts on pension funds in the region, especially when looking at the recovery and stimulus measures being taken as well as the role of the central bank.
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