The growing role of defined contribution (DC) pension provision “does not in itself justify an expansion of supervisory mandates”, PensionsEurope has argued.

In its response to the European Pensions Insurance and Occupational Pensions Authority (EIOPA) call for evidence to inform the development of its DC toolkit, the association said the existing prudential framework, including the fit and proper requirements, remains adequate for both defined benefit (DB) and DC schemes, but instead said aspects of supervision within the existing framework will become more important.

“At the same time, as members in DC arrangements bear more individual responsibility, we recognise that the conduct aspects of supervision – such as clear, balanced communication, transparency of costs and charges, and effective support at key decision points, including decumulation – naturally gain importance within the existing regulatory framework,” PensionsEurope wrote.

It stressed that no new powers, or additional layers, of supervision are required; instead, a “sharpened focus” on the quality and usability of information provided to members is needed, so they can “make informed choices without creating unnecessary burdens on schemes or increasing costs for savers”.

Furthermore, PensionsEurope argued that national regulators and supervisors are “better placed” to define the areas of conduct regulation and supervision than EU bodies.

More broadly, it reiterated that there is no one-size-fits-all model in the EU and the toolkit should reflect this.

“Rather than prescribing uniform solutions, the toolkit should provide flexible options that member states can adapt to their own pension landscapes, social policies, and legal frameworks.”

The association said any proposed regulation should be “justified, necessary, and proportionate”, recognising that members ultimately bear compliance costs in DC schemes.

“The toolkit should also support – and certainly not hinder – the development of well-designed collective and hybrid schemes, which the report identifies as offering valuable cost efficiency and risk sharing mechanisms. Finally, we stress that the reduction of red tape correctly ranks high on the EU's political agenda, and that this should also apply to supplementary pensions and their providers.”

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