EU Debates Future Pension Provision
Friday, July 09, 2010

The European Commission has launched a Europe-wide public debate on how to ensure adequate, sustainable and safe pensions and how the EU can best support national efforts.

With existing retirement systems under massive strain due to ageing populations and fiscal constraints, the consultation document, a green paper, poses a series of questions inviting all interested parties to contribute views, opinions and ideas on confronting the pension challenge and how the EU can contribute to the solutions.

Presenting the consultation paper László Andor, EU Commissioner for Employment, Social Affairs and Inclusion said:

"The number of retired people in Europe compared to those financing their pensions is forecast to double by 2060 - the current situation is simply not sustainable. In addressing this challenge the balance between time spent in work and in retirement needs to be looked at carefully.”

“The choice we face is poorer pensioners, higher pension contributions or more people working more and longer. One of the great successes of Europe’s social model is to ensure that old age is not synonymous with poverty. This is a promise on which we have to continue to deliver and the dialogue we are launching should help member states take the right decisions to ensure pension systems are fit for purpose".

Among the issues addressed in the green paper are the barriers facing people who work in different EU countries and the internal market for retirement products, the protection of pensions in times of economic crisis, and pension transparency for consumers. The consultation period will run for four months, ending on November 15, 2010.

The EU review of pension provision has been welcomed by the UK Investment Management Association (IMA). "This is a timely initiative by the Commission," said Richard Saunders, Chief Executive of the IMA. "Adequate pension provision is important for everybody in face of rising longevity and pressure on public finances."

"Though it is important to sustain existing private pension provision, the focus of policy needs to be on increasing saving in the future. To that end, consumers will need accessible and transparent long-term savings products," Saunders added.

"The investment management sector has blazed the trail in developing truly cross-border products, offering consumers across Europe portability, choice and significant economies of scale. There is now an opportunity to build on the success of UCITS and bring new and simpler long term saving vehicles to European consumers. We will be urging the Commission to seize it," he concluded.