The European Commission (EC) has published a proposal for a pan-European pension insurance product. The goal is to give more choice for Europeans when saving for their retirement. The idea is for the new product to have the same standard features, wherever it is available. It could be sold by a wide range of suppliers – banks, insurers, pension funds, investment intermediaries and etc.
The new scheme will complement existing pensions from state, professional and national private pension funds.
“The pan-European pension product is a step towards realizing the idea of building a Union of Capital Markets”, commented the European Commissioner for the Euro and Social Dialogue, Valdis Dombrovskis, during the presentation of the proposal.
A little earlier, the commissioner said that the product could be used to fill the gap in pension systems across the EU. In 2060, every two people of working age will have one retired person. Currently this ratio is four to one.
The EC also notes that the European personal pensions market is fragmented and uneven. The rules in the different countries are varied and this hinders the development of competition.
Today’s proposal provides for the possibility of transferring the product across borders, that is to say contributing to it in another country as well as switching suppliers, both at national and transnational levels.
The service providers will be able to develop and offer the product in several community countries, says the proposal. According to the EC, only 27% of Europeans aged 25-59 have a pension product. The proposal for a pan-European pension product is part of a regulation that is yet to be discussed in the European Parliament and the Council of the EU. Once approved by the institutions, it will enter into force 20 days after its publication in the Official Journal of the EU.