In a report published on Wednesday 21 May, the European Court of Auditors criticises the effectiveness of EU initiatives on supplementary pensions. Despite a regulatory framework that has been in place for several years, and a market worth some €2,800 billion in assets, European integration in this sector remains marginal, the auditors observed.
They believe that the development of cross-border institutions for occupational retirement provision continues to be hampered by asymmetric administrative requirements and minimal harmonisation of supervisory practices. As for the pan-European individual retirement savings product (PEPP), which is supposed to be a pillar of intra-European mobility (see EUROPE 12627/13, 13534/22), according to the Court it has still not found its audience due to a lack of tax incentives and a strict framework for charges.
The Court also noted major shortcomings in terms of transparency: contributors and beneficiaries do not have a consolidated view of their pension entitlements, nor do they have sufficient information on the net returns of existing products. This lack of information compromises people’s ability to anticipate their future income and to choose between the different pillars of the system.
At a time when the European Commission is preparing to revise the regulatory framework for institutions for occupational retirement provision - notably through the ‘IORP II’ directive - and the PEPP, the Court calls for more ambitious action to make supplementary pensions a genuine lever for the Union of capital markets, while also supporting social protection systems.
“We are looking forward to seeing, I think, in the fourth quarter of this year, more specific proposals from the Commission, together with IOPA, to address the deficiencies that we have identified, and to have a general look at how to promote the development of the supplementary pensions at the EU level”, said auditor Mihails Kozlovs on Wednesday morning, when asked about the relevance of the strategy for a ‘Savings and Investment Union’, presented in March by the European Commission (see EUROPE 13603/5).
See the report by the European Court of Auditors: https://aeur.eu/f/gxg (Original version in French by Bernard Denuit)