The European Union pension’s landscape is in need of reforms as the percentage of the EU population covered by decent pension systems is too low, the Chairman of the European Insurance and Occupational Pensions Authority (EIOPA) Gabriel Bernardino told the 9th European Pension Funds Congress, held in Frankfurt on 18th November.
Mr Bernardino pointed out the diverse nature of the various pension systems available in Europe with “pay-as-you-go, occupational, and personal pension vehicles playing a very different role in the 28 member states. Irrespective of their differences, all these systems face the same challenges to their ability to deliver on their financial promises. These challenges include longevity growth, a sluggish economic environment, low employment, budget deficits and debt burdens, low interest rates and volatility of asset values”, he said.
“To ensure that citizens will have a chance to maintain appropriate standards of living in their retirement, it is self-evident that we need a comprehensive package of reforms”, he said. “Changes to ensure the future sustainability of public pay-as-you-go pension systems need to be accompanied by reforms incentivising the creation of funded complementary private schemes, be it second pillar occupational pensions or third pillar personal pensions.”
When outlining EIOPA’s policy priorities to respond to these challenges, Mr Bernardino said that what is needed is a robust and proportionate EU regulatory framework capable of regaining the trust and confidence of EU citizens in private complementary pension savings. To achieve this, the regulatory framework must offer enhanced sustainability, strong governance and full transparency, he said.
Mr Bernardino concluded that “creating sustainable and adequate pension systems will be one of the major challenges for Europe in the coming years.” He added that, at the EU level, EIOPA will work to make sure that EU citizens are well informed about their private pension schemes, get a fair deal and can trust that the promises made to them will be fulfilled
He said “EIOPA is committed to creating a sustainable, safe and adequate pension system through a robust and proportionate EU regulatory framework whose purpose is to create real benefits for the EU, its economy, businesses and citizens.”
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