Today, the European Commission unveiled its package on supplementary pensions, focusing on closing the pensions gap and enhancing retirement adequacy for Europe’s citizens. This initiative is a key component of the Savings and Investments Union, reflecting the European Commission's firm commitment to helping individuals build financial security for their retirement. Increasing pension assets across Europe will also bolster our capital markets and support economic growth.
The package includes non-binding recommendations for Member States to implement pension tracking systems and pension dashboards throughout the EU, while also encouraging wider adoption of auto-enrolment for supplementary pensions. Furthermore, it presents specific legislative proposals to review the IORP II (Institutions for Occupational Retirement Provision) Directive and the PEPP (Pan-European Pension Product) Regulation.
EFAMA strongly supports the European Commission’s recommendations for Member States, in particular:
Auto-enrolment for occupational pensions: Evidence from across Europe clearly indicates that this mechanism is the single most effective way of increasing participation and savings rates, thereby improving pension adequacy.
Pension tracking systems and dashboards: Tracking systems help citizens better understand their accrued savings and projected retirement income, while national pension dashboards allow policymakers to assess the adequacy and sustainability of pension systems across Member States. Together, these tools can enhance transparency and help close information gaps that currently prevent citizens from planning for retirement effectively.
Tax incentives: These are essential to encourage the uptake of supplementary pensions. For individuals, they lower the perceived cost of saving, reward long-term financial planning, and thus promote higher participation. For employers, they ease the financial burden of offering workplace pensions, especially for SMEs.
EFAMA also supports the European Commission’s efforts to reform the Pan-European Personal Pension Product (PEPP) to make it a viable private pension alternative:
We strongly support the removal of the fee cap and mandatory advice for the basic PEPP, as this will substantially improve its viability and availability. However, if an investor requests advice, only independent financial advisers can be used. We are concerned that this requirement could significantly limit the PEPP's accessibility and ultimate market success, given that independent advisers represent a small fraction of the EU market.
We strongly agree that the basic PEPP should rely on a life-cycle investment strategy rather than ‘hard’ capital guarantees, which limit returns. Life-cycle strategies balance risk and return over time by combining professionally designed, age-appropriate investment approaches with long-term growth potential, which improves retirement outcomes for savers.
We strongly caution against introducing Value for Money (VfM) provisions in their current form. Experience from the Retail Investment Strategy (RIS) shows that VfM assessments can quickly become a complex and burdensome exercise that brings unclear added value to investors. The RIS framework itself is still under development and has not yet been finalised or tested. It also remains unclear how VfM could be assessed for such long-term products, which currently lack peer groups for comparison.
Tanguy van de Werve, Director General, commented:“The Commission’s initiative to address Europe’s widening pension gaps is a much-needed one—as this is a ticking time bomb for retirement security. Their promotion of auto-enrolment, life-cycle investment strategies, and tax incentives can help savers build adequate pension income, while pension trackers increase transparency and awareness. We rely on Member States to implement these measures as a priority going forward. Done right, these measures will play a central role in securing sustainable retirement savings for all Europeans.”
Kimon Argyropoulos, EFAMA Regulatory Policy Advisor, commented: “Linking the value-for-money provisions for the Basic PEPP to the benchmarking methodology developed under the Retail Investment Strategy - a framework that is yet to be established - risks introducing untested and potentially complex requirements that could distract from the more immediate task of creating a viable PEPP market. The priority should be to foster market development, simplicity and accessibility for savers across Europe.”
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Notes to Editors
You can find the Commission’s supplementary pensions proposal here.
Read our full response to the Commission’s call for evidence on pensions here.
For further information, please contact:
Hayley McEwen
Head of communications and membership development
