European Commission is “concerned about those who are younger and whose pension, if only subject to the public system, may be too low to guarantee them adequate living conditions in old age”
The European Commission wants to guarantee “adequate living conditions in old age” to future generations in the European Union (EU), as part of a commitment to supplementary pensions.
“What matters to us here is not so much the estimate of how much this can generate in gains, it is not so much a question of value, and above all this is also something that will be applied over time, but what we clearly want is to promote this trend of creating conditions so that pensions are adequate for the next generations”, said today the European Commissioner for Financial Services and the Savings and Investment Union, Maria Luís Albuquerque.
In response to Lusa at a press conference in Brussels on the day the institution released proposals for automatic supplementary pensions and professional funds, the person responsible pointed out that the European Commission is “concerned about those who are younger and whose pension, if they are only subject to the public system, may be too low to guarantee them adequate living conditions in old age”.
“Therefore, what we really want is to move in that direction and we want Member States to follow these recommendations because this is what will guarantee a better life for future generations when they reach their retirement”, he pointed out.
Maria Luís Albuquerque acknowledged the low wages in Portugal and, despite not having spoken to Portuguese government officials about the proposals, indicated that “the people with the lowest wages are those who will find themselves at greater risk of pension poverty if nothing is done to resolve this issue”.
“It is even more important if we think about this part of the population or the Member States where this part of the population is most relevant”, he added.
Asked by Lusa about whether companies in Portugal could provide this type of supplementary pension plans, Maria Luís Albuquerque concluded that “there are multiple examples of how such a system can be implemented, encouraging the adhesion of all companies, regardless of their size, and also naturally to provide coverage for those workers who have less traditional forms of self-employment, with less traditional forms of participation in the labor market, and who will certainly also have to be protected when it comes time to receive a pension”.
The European Commission today asked European Union countries to adapt their pension systems to promote complementary mechanisms – such as retirement insurance and retirement savings plans (PPR) -, little used in Portugal, suggesting automatic enrollment and professional funds.
The Portuguese system, which is mainly based on the public Social Security pension, faces, like other EU countries, challenges such as the rapid aging of the population, future pensions that tend to be lower, low adherence to complementary plans and irregular contributory careers.
Faced with such issues, Brussels is asking Portugal and other European countries to start using automatic enrollment in supplementary pension plans, with a free exit option, which would involve companies making such plans available and workers contributing small percentages of their salary to such savings.
These are just recommendations – which must be approved by the Council and Parliament – as this is a national competence.
The Commission estimates gains of more than one trillion euros if EU citizens start investing their savings in complementary mechanisms.
