European policymakers have been urged to embed a stronger social dimension in pension policy, with a new report from several European pension associations calling for greater support of the Rhineland model of pensions.

The shared vision for the future of the occupational pensions was outlined in a working paper from Germany’s Working Group for Occupational Pensions (aba), the Dutch Pensions Federation (PensioenFederatie), Belgium’s PensioPlus, and the Austrian Association of Pension Funds and Provident Funds (WKO).

In particular, the joint report called for a stronger commitment to the Rhineland model, which combines robust social protection with investments that support Europe’s long-term future.

The paper recognised that Europe is ageing "rapidly", warning that, as a result, a declining share of active Europeans will need to support a growing group of pensioners, both financially and by providing care.

It also acknowledged a growing need for strategic investment in Europe, explaining that, to maintain a competitive economy and to attain other goals such as the green transition and increased defence capabilities, the EU needs a significant boost in investments.

However, the paper argued that the Rhineland model of occupational pensions could help address both pressing challenges, providing a "robust framework" for change.

The paper argued that the Rhineland Model stands for social partnership, solidarity, and long-term responsibility—principles that have united Germany and the Netherlands in occupational pensions for many years.

Unlike purely market-driven systems, it explained that the Rhineland model positions pension funds as social institutions: delivering reliable pensions while investing for the long term in projects like renewable energy and infrastructure.

And whilst demographic changes are putting pressure on pay-as-you-go systems, the paper suggested that a gradual build-up of funded occupational pensions could offer a more sustainable and socially acceptable path forward.

Although the European Commission's latest consultation has put a strong emphasis on promoting private savings, for example through the Pan-European Pension Product (PEPP), the federations pointed out that these solutions are much closer to the Anglo-Saxon model.

And while they can be useful in Member States without social partner structures nor occupational pensions, the associations argued that they should not replace Rhineland model pension systems.

Given this, it argued that Member States should be free to decide in which of the two directions they want to steer their occupational pension system.

This was one of several key recommendations outlined as part of the report, as the associations also called on the European Commission (EC) to promote broad coverage of occupational pensions – preferably through mandatory or automatic enrolment in collective agreements.

"It is urgent to start soon to build sizable pension pots in the medium term. To avoid excessive ramp-up costs, premium levels could start low and be increased gradually," it stated.

In addition to this, the paper encouraged the EC to promote the development of pension tracking services in Member States that do not yet have them, and to provide clear and accessible pension information for participants.

The paper also emphasised the need for more attention for pension provision within the European economic governance framework, to safeguard both sustainability and adequacy.

"To address the ageing crisis, pension adequacy and financial stability of pension systems should be seen as two sides of the same coin," the paper stated.

"An adequate but underfunded pension system is a recipe for social unrest, but so is a system that leads to insufficient pension provision. Shortcomings in either impact European economic stability or growth. Pension adequacy should therefore be integrated in the European economic governance framework."

It also called for targeted measures to reduce the gender pension gap, suggesting that the EC should facilitate the exchange of best practices around closing gender pay and pension gaps around life events.

In addition to this, the paper suggested that the EC should establish a European working group on ageing, tasked with formulating a Pension Policy for a Social and Competitive Europe in order to support Member States in finding ways of strengthening their occupational pension systems.

Commenting on the paper, Dutch Federation of Pension Funds chair, Ger Jaarsma, said: “Together we are showing that strong occupational pensions benefit not only employees and employers, but society as a whole.

"They provide security while also channelling investments into areas Europe urgently needs, such as infrastructure and sustainability.”

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