The European Commission (EC) has launched its new Savings and Investments Union (SIU) strategy, outlining plans to encourage greater use of auto-enrolment, and to review the existing regulatory frameworks in place.

The new initiative aims to improve the way the EU financial system channels savings to productive investments, by offering EU citizens broader access to capital markets and better financing options for companies.

In particular, the EC said that the SIU strategy aims to develop and enhance supplementary pensions to ensure financial security for EU citizens, with the EC set to direct its efforts towards creating strong multi-pillar pension systems which include occupational and personal pensions, on top of public ones.

As part of this, the EC outlined plans to review the existing frameworks for Institutions for Occupational Retirement Provision (IORPs) and the Pan-European Personal Pension Product (PEPP), in order to improve their effectiveness and attractiveness, including cross-border accessibility.

In addition to this, the EC said it will promote greater use of auto-enrolment in occupational pension schemes, arguing that this has already proven effective in increasing participation rates of workers and enhancing returns for pension-holders.

The commission will also promote the use and best practice of pension dashboards, which will provide member states with a better view of the sustainability and adequacy of their pension system, as well as of pension tracking systems.

In addition to encouraging greater investment in the EU, the EC suggested that the policy changes outlined will be especially beneficial for citizens, arguing that stronger and more vibrant supplementary pension systems help people better save for retirement and overall have positive financial and social benefits for citizens.

EC president, Ursula von der Leyen, said: "With today's proposal for a Savings and Investment Union we are achieving a double win. Households will have more and safer opportunities to invest in capital markets and increase their wealth.

“At the same time, businesses will have easier access to capital to innovate, grow and create good jobs in Europe.”

The new initiative was welcomed by Pensions Europe, which highlighted the plans for the SIU as a “major step” in strengthening Europe’s financial system, expanding investment opportunities for institutional investors such as pension funds and individual citizens, and enhancing the EU’s economic competitiveness amid global challenges.

The group also suggested that the policy measures proposed in the SIU —if well implemented— could significantly enhance pension coverage and adequacy across Europe.

In particular, PensionsEurope said that the EC's proposal to integrate SIU measures into country-specific recommendations within the European Semester is "highly relevant".

Indeed, PensionsEurope said that, as pensions are a national competence, the EC should make full use of the existing governance framework to encourage and support Member States in implementing meaningful reforms

It also welcomed the focus on auto-enrolment and pension tracking systems, pointing out that auto-enrolment has proven highly effective in countries such as the UK and Lithuania, and Ireland’s upcoming 2025 scheme is expected to bring 800,000 additional workers into occupational pensions.

The association was also supportive of the planned review of PEPP, arguing that this has "not succeeded thus far", with reforms "necessary" to make the PEPP more accessible, competitive, and attractive to savers.

However, PensionsEurope emphasised that the specificities of the IORP II Directive focusing on occupational pension institutions and the PEPP Regulation on a European personal pension product are fundamentally different legal frameworks.

Given this, it argued that if both reviews were to be launched simultaneously by the European Commission, they must be kept as separate policy issues. Efforts to improve savings and investment products are equally important.

This was not the only area of concern, as PensionsEurope also warned that the plan to launch all pension-related initiatives in Q4 2025 will require careful planning and adequate resources from both the European institutions, as well as various stakeholders.

More broadly, PensionsEurope argued that further development of securitisation markets is welcomed and needed, stating that "crucially", the success of both funded pensions and broader savings and investment initiatives depends on the implementation of attractive tax incentives.

While this is a national competence, PensionsEurope said that the EU should also encourage member states to introduce such incentives through the country-specific recommendations of the European Semester.

PensionsEurope CEO and secretary general, Matti Leppälä, said: “Europe is facing urgent challenges—declining competitiveness compared to the US and China, geopolitical instability, demographic shifts, and infrastructure gaps.

"Pension funds cannot solve these issues alone, but they can be part of the solution. The SIU has the potential to improve European capital markets, increase pension coverage and savings, and create better investment opportunities for pension funds.

"If the EU advances with smart, bold policy actions, pension funds can help drive a stronger, more resilient, and competitive European economy.”

The Dutch Federation of Pension Funds also welcomed the EC's plans, suggesting that the policy agenda should ensure, among other things, that Europeans invest more and more productively, such as in Dutch businesses.

However, country-specific timing concerns were raised, as the Federation emphasised the need for any new European obligations in the Netherlands to be implemented after the implementation of the Future Pensions Act.

"It is important to avoid simultaneous, complex Dutch European processes," the Federation stated.

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