Although overall, it considers that the European Commission's proposal to create a controlled quality label for pan-European personal pension products (PEPP) is a step in the right direction, PensionsEurope nonetheless called, on Friday 26 January, for this proposal to come within a broader European pensions strategy.
“No single EU policy measure alone will close the pension gap, but a coordinated mix of measures could help member states and the social partners to tackle this important issue that will be particularly relevant to future generations”, the organisation writes in its position paper.
It is calling for the EU to adopt a global and broader European strategy, to be based on a multi-level approach and aiming to reduce the pension gap between member states. An approach of this kind should not, moreover, be limited to voluntary private pensions, but also support the development of complementary private pension savings, explicitly taking account of occupational pensions, it states.
Furthermore, for such an initiative to be a success, the organisation proposes several changes to the proposal currently on the table (see EUROPE 11819).
Occupational pension institutions. PensionsEurope supports the inclusion of institutions for occupational retirement provision (IORP) as potential suppliers of PEPPs, but considers that certain clarifications are necessary.
“We think that giving the unlimited possibility for IORPs to offer PEPPs would entail the risk of damaging existing well-functioning pension systems, in particular in those countries that count on well-established second pillar pensions”, said the organisation’s President, Janwillem Bouma.
It is calling for a more nuanced solution, for instance proposing to give the member states leeway to decide on the degree to which they will allow IORPs to offer PEPPs.
“It will be key that the PEPP Regulation will be redrafted in such a way that will ensure that the specific role, nature and structure of IORPs is respected, while at the same time providing legal certainty”, Bouma stresses.
Portability and compartments. The organisation considers the requirement to set ‘national compartments’ in place for all member states no more than three years after the regulation enters into force, in order that PEPPs can be transferable, will be a considerable burden on providers.
It proposes two alternative options to remedy this: establishing partnerships between providers from different member states, as proposed Parliament rapporteur, Sophie in’t Veld (see EUROPE 11935), or to extend the deadline by three years to allow providers to amortise the associated costs and investments.
Default guarantee option. PensionsEurope is also in favour of the Commission’s proposal to offer a limited number of investment options, including the controversial default investment option, on which the various stakeholders are far from agreement (see EUROPE 11888 and EUROPE 11909). It argues that the regulation should provide for this option to come with a capital guarantee or recourse to a so-called life-cycle investment strategy.
On the other hand, the organisation has reservations concerning the competencies that would be given to the Commission and EIOPA on the adoption of delegated acts in the area of pensions. They could then modify the regulation by means of a simplified procedure involving no control for the Parliament or Council, it fears.
PensionsEurope’s position is available at the following address: http://bit.ly/2DMMUDf. (Original version in French by Marion Fontana)