Brussels, 25/04/2016 (Agence Europe) - Political actions in the field of pension funds would be an important contribution to the objectives of the Capital Markets Union, according to a report published by the European Commission on Monday 25 April.
The Commission's analysis shows that by increasing the assets of pensions regimes by 73% in the Eurozone and 60% in the EU, in other words to come into line with the level in the United States, this would generate an additional capitalisation of the stock market by 31% and 26% of GDP respectively.
On the same day, the Commissioner for Financial Services, Jonathan Hill, explained from Frankfurt that there are currently four people working in Europe for every one person over the age of 65. “That figure will drop to two in work for every person over 65 over the next 50 years. That's a huge demographic challenge happening at the same time as the state is reducing its role in more and more countries”, he added. He went on to say that there needs to be a reflection on how to encourage a more developed private pensions market across Europe.
The Commission's report reveals that Denmark, Finland, Ireland, the Netherlands and the United Kingdom have large private pension funds markets relative to the size of their financial system or economy. Just five member states also have reserve funds for pensions, and most of these are small.
“The bigger the private pensions sector, the deeper the capital markets”, Hill explained.
In an interim report on the Capital Markets Union (CMU) published the same day, the Commission explains that it will publish a consultation document before the summer, assessing the benefits of a framework aiming to establish a European market for pension funds and will take national experiences as its basis to identify the conditions to ensure that these markets flourish, including questions of transparency and consumer protection. It will also publish a call for tenders before the summer for a study into the budgetary and regulatory approaches conducive to the development of personal pension schemes. (Original version in French by Elodie Lamer)