On Thursday, the European Commission (EC) adopted a package of measures to help citizens ensure adequate retirement income by improving access to better and more effective supplementary pensions. The goal is to supplement – not replace – public pensions, which are the basis of pension systems in all EU member states, informs TASR reporter.
The legislative package is part of the EC’s Savings and Investments Union (SIU) strategy, which aims to create more opportunities for households to build their wealth through capital markets and boost the EU’s economic growth and competitiveness.
Considering demographic changes and the dynamics of the labor market in the EU, supplementary pensions – both occupational and personal pension systems – can help citizens achieve a more diversified pension income. This will increase their financial security and stability in retirement.
They can supplement public pension benefits, which in many cases will not be sufficient to maintain an adequate standard of living, especially among vulnerable people and women. The difference in pensions between women and men currently reaches 24.5%.
According to the EC, stronger and more efficient supplementary pension systems can contribute to economic growth and European competitiveness by mobilizing long-term savings for productive investments.
The aim of the proposed measures is to strengthen the demand for supplementary pensions, as well as their offer while fully respecting the competence of Member States to organize and design their national pension systems, as well as the autonomy of the social partners if they are responsible for the creation and management of pension systems.
The Commission recommends that Member States ensure automatic inclusion of workers in supplementary pensions with full freedom for individuals to opt out. Furthermore, they should develop comprehensive pension tracking systems in order to provide citizens with a clear overview of their pension rights and expected benefits in all pension systems.
They should be compatible with the European tracking service and support cross-border mobility. National governments should develop national pension overviews so that policymakers from member states have a better view of the coverage, sustainability and adequacy of their multi-pillar pension system. The national overviews would be reflected in the EU-level pension overview.
EC proposals to amend the directive on the activities of occupational pension institutions (IZDZ II) and the regulation on pan-European personal pension product (PEPP) will now have to be discussed and approved by the European Parliament and the Council of the EU (member states).
