PensionsEurope ‘remains positive’ about EU Commission pension recommendations

PensionsEurope has said that, in principle, it remains positive about the non-legislative recommendations included in the European Commission’s supplementary pensions package.

The recommendations, which form the package alongside legislative proposals for changes to the IORP II Directive and Pan-European Personal Pension Regulation (PEPP) are aimed at member states and cover areas such as pension tracking systems, dashboards, auto-enrolment and tax and other incentives.

On pension tracking systems, PensionsEurope said they could enhance individuals’ capacity to plan for their retirement but that “a shorter and more principle-based wording of the recommendations would have been more helpful and adequate”.

The Commission’s recommendation also covers national pension dashboards, including suggesting indicators.

PensionsEurope said it believed a dashboard must offer a forward-looking perspective on the development of pensions and that an “unbiased public discussion should also be possible with a visible dashboard”.

However, it warned that the creation of cross-country rankings or benchmarks that ignore the diversity of member states’ pension systems could have negative effects. And said it was critical of the idea to develop a common methodology at EU level to enable comparisons between individual countries.

On auto-enrolment, PensionsEurope said it “represents a very efficient policy measure to deliver a real and structural boost to supplementary pensions across the European Union”.

It welcomed that the Commission recognised the importance of contribution levels, in addition to the issue of achieving broad participation.

“It’s critical to set contributions at the appropriate level,” said PensionsEurope.

“Auto-enrolments use of inertia can make it effective, as people do not opt out. However, it can also mean that many will not proactively choose to increase their contribution levels if auto-enrolment contributions are inadequate.”