Abstract

Personal pension markets are unequally developed and personal pension products are unequally affordable across the European Union (EU). People who wish to save more for retirement need a greater choice of suitable personal pension products that rely on capital markets-based investments.The paper aims to present and explain the need for product diversity in the pension scheme. This kind of proposal should create a quality label for EU personal pension products and increase trust among consumers, but also could lead to complications and interference with the current system at national level. An EU initiative on personal pensions could therefore complement the current divergent rules at EU and national level by adding a pan-European framework for pension, for individuals who wish to use this additional saving option.

Highlights

  • Europe is facing an unprecedented demographic challenge

  • Personal pension markets are unequally developed and personal pension products are unequally affordable across the European Union

  • People who wish to save more for retirement need a greater choice of suitable personal pension products that rely on capital markets-based investments

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Summary

Introduction

Europe is facing an unprecedented demographic challenge. For every retired person in 2060, there will only be two people of working age, compared to four today. The offers are concentrated in a few Member States, while in some others they are nearly non-existent This variation in supply is linked to a patchwork of rules at EU and national levels, which impede development of a large and competitive EU-level market for personal pensions. This is the reason why the Commission launched recently a proposal that will lay down the foundations to offer consumers a new pan-European option to save for retirement. They will complement existing state-based, occupational and national personal pensions, but not replace or harmonise national personal pension regimes

Grounds for introducing a Pan-European Personal Pension Product
Objectives of the proposal
Impact assessment
Conclusions
Findings
References:
Full Text
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