PensionsEurope has cautioned that the European Commission’s drive to promote standardised savings and investment accounts (SIAs) could inadvertently weaken well-functioning occupational and personal pension systems, potentially undermining long-term retirement outcomes across the EU.
In its official response to the Commission’s call for evidence on SIAs, the Brussels-based association said it welcomed efforts to boost retail participation in capital markets. However, it warned that the proposed framework must be clearly distinguished from pension products to avoid distorting savings flows and eroding trust in existing retirement arrangements.
“While SIAs can be used to foster retail participation in capital markets, they could in member states also risk undermining the existing well-functioning occupational pension systems that collectively manage long-term savings,” PensionsEurope said.
PensionsEurope took issue in particular with the possibility that SIAs might benefit from favourable tax treatment despite not being long-term in nature. “Offering preferential tax treatment to SIAs that are not long-term products could jeopardise the objective of providing sufficient income replacement in old age,” it said.
The Commission’s call for evidence, launched in June, forms part of its broader retail investment strategy and aims to create a ‘Blueprint’ for savings and investment accounts that could be used by EU citizens to access capital markets in a simple and tax-efficient way. A formal recommendation is expected later this year.
PensionsEurope also expressed concerns that the five-year investment horizon referenced in related proposals – such as the ‘Finance Europe’ label – would be too short to support long-term retirement adequacy or provide meaningful long-term capital to EU markets.
It also criticised proposals to require a minimum share of SIA investments to be directed towards EU-based assets, saying such a move would run counter to the principle of diversification and risk-limiting returns to savers.
While supportive of the soft-law approach via a recommendation rather than binding regulation, PensionsEurope warned against overreliance on competition and digital tools to ensure take-up, particularly in member states with lower financial literacy or digital engagement.
“The Commission should carefully consider the interaction between SIAs, occupational and personal pensions to avoid jeopardising the objective of providing good retirement outcomes for EU citizens,” the response concluded.
The latest digital edition of IPE’s magazine is now available
