There is no need for EU-level action to boost the size of workplace-based pension funds, according to PensionsEurope.
Responding to a European Commission call for evidence on supplementary pensions, the Brussels-based industry association said consolidation of pension funds had been ongoing in many European countries and that pension fund investments were often executed by specialised service providers with “adequate scale to perform investments efficiently”.
“Therefore, we believe that no particular actions would be necessary or useful,” PensionsEurope said.
“The objective of the IORP II Directive should be to improve Europeans’ access to occupational pensions. Smaller and medium-sized pension funds are able to deliver decent returns and professionally managed pensions.”
PensionsEurope’s feedback to the call for evidence gives an idea of how it will argue in response to the Commission’s targeted consultation on supplementary pensions.
“PensionsEurope is currently working with its members on the targeted consultation on supplementary pensions,” it said. “In our response to that consultation, we will go into much more detail than this general call for evidence allows, particularly given the short deadline.”
The general call for evidence ran from 23 June to 21 July, with the targeted consultation launched on 13 June and running until 29 August.
‘Sensitive’ issue
On the topic of the scope of the EU pension fund law, PensionsEurope said it was a very sensitive issue “and PensionsEurope believes that any proposal on the scope must take into consideration the limited EU competences in pensions and other political parameters as well as different technical aspects”.
With regard to the Pan-European Personal Pension Product (PEPP), the industry association said that member states should be given the option to opt out if the PEPP framework were extended to cover the second pillar.
In a staff paper on the PEPP, EIOPA suggested the possibility of introducing a system of auto-enrolment in a personal pension scheme at EU level for every EU citizen, as well as considering a PEPP that would combine occupational and personal pensions.
The Commission is expected to publish a legislative proposal on the IORP II Directive and the PEPP Regulation in the fourth quarter of this year. It has also indicated it will issue recommendations to Member States on topics such as auto-enrolment and pension tracking systems.
“The guiding principle for any initiative on supplementary pensions is to increase uptake in supplementary pensions, with a view above all to increase financial security in retirement, and also to reinforce the supplementary pension sector as a long‑term investor,” it said in its paper about the targeted consultation.
The IORP II and PEPP Regulation reviews are linked to the Commission’s goal to achieve a Savings and Investments Union, as part of which it wants to see household savings directed into productive and innovative investment to the benefit of the EU economy.
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