EFAMA welcomes the proposed revised OECD Roadmap. We would like to congratulate the OECD team working on private pensions for the wide-ranging research projects it undertook over the past years, which provided sound, evidence-based arguments to update the 2012 Roadmap.
We strongly support the main messages of the Roadmap, in particular the importance of
- ensuring the coherence of a DC pension component within a broader pension system.
- providing financial incentives to promote retirement saving and ensure inclusiveness.
- establishing straightforward, stable and common tax rules across retirement saving plans to avoid confusion and maintain the attractiveness of saving for retirement.
- informing savers about the cost of guarantees in terms of expected returns and retirement income.
- considering automatic enrolment to enhance participation in DC plans.
- limiting early access to retirement savings to exceptional circumstances.
- stressing the role of contributions and investment returns in reaching retirement income objectives.
- fostering competition in the DC market and focusing on value-for-money rather than cost alone.
- providing well-designed default options such as life cycle investment strategies.
- recognizing that annuities are not necessarily the best protection against longevity risk.
- providing flexibility in the choice of solutions for the pay-out phase.
- ensuring appropriate mortality assumptions are used by providers of lifetime pension income.
- ensuring effective, personalized, regular, consistent and unbiased communication to members.
- adopting national financial education strategies to increase awareness about the importance of retirement saving.
There are, however, a few points on which some clarifications and adjustments would be useful to reinforce the recommendations and avoid misunderstanding. Details can be found in the full response, downloadable above.