PensionsEurope has called on the European Commission to include automatic enrolment (AE) in its country-specific recommendations as part of its response to the consultation on the Savings and Investment Union (SIU).

In its response, the association said AE has “significant potential” to address Europe’s retirement challenges. It highlighted the UK and Lithuania, which have both had success with the policy.

“We encourage the European Commission to incorporate auto-enrolment into its country-specific recommendations within the European Semester cycle, endorsed by the member states,” it stated.

However, it cautioned that the EC must recognise that no single EU policy can address all existing gaps. Therefore, a “coordinated mix of measures is important”, including addressing demographic shifts, ensuring adequate retirement income, improving financial literacy, and raising awareness of the need to save for retirement.

“In line with the subsidiarity principle, member states are best positioned to determine and implement the necessary reforms,” PensionsEurope stated.

Regarding another pension product, the pan-European personal pension (PEPP), Pensions Europe believes that given its “limited uptake”, due to obstacles such as the fee cap, endorsing and enhancing national products is a more effective approach.

Furthermore, the association highlighted tax incentives as being “important to boost participation in occupational and personal pensions”.

“The EU should encourage member states to implement them through the country-specific recommendations of the European Semester. Well-designed tax benefits can also channel savings into productive, high-return assets, making personal pensions more attractive to citizens,” it stated.

More generally, the association supports the EC’s efforts to complete the Capital Markets Union (CMU). While progress has been made, including the adoption of Faster and Safer Relief of Excess Withholding Taxes (FASTER), PensionsEurope believes further actions are needed to improve market integration and enhance cross-border investment efficiency.

It also stated that for pension funds, fiduciary duty is part of their legal obligations and must not be compromised for other policy objectives when it comes to channeling private investments into Europe’s economy.

Overall, PensionsEurope said it supports the EC’s agenda for simplification.
“The impacts of horizontal legislation are significant for pension funds, which are often not-for-profit and managed by social partners. In particular, smaller and cost-efficient pension funds have been largely impacted by broad legislative and Level 2 measures.

“PensionsEurope remains committed to working with the European Commission and other stakeholders to strengthen retirement security for European citizens, with funded pensions playing a key role in achieving this goal,” it concluded.

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