It is time for the European pensions industry to act as Europe needs a competitiveness boost, European Parliament member, Stephanie Yon-Courtin, has argued.

Speaking at the European Insurance and Occupational Pensions Authority’s (EIOPA) Annual Conference in Frankfurt last week, Yon-Courtin said that Europe was at a “pivotal moment” and suggested that the investment and finance industry was the solution.

“We already have all of the ingredients on the table, but we need willpower to bring them together,” she said.

She acknowledged the many challenges facing the industry, such as the ageing population, the realisation of the green transition and the gender pensions gap.

She said to ensure action on this was carried out, there should be a more “effective and simple framework while upholding consumer protection and financial stability”, suggesting that the pensions sector would be a “key driver" in this new agenda.

“They will have a role to play in addressing the pension gap, ensuring against new risk and channelling more investment into the European Union (EU) economy. We are now lucky to have a future commissioner dedicated to building the savings and investment union. However, her task will not be easy,” she said.

“With an ageing population, the pension system in the EU, including my home country France, is really low and at real tension. With the many issues most of us face we can not really endure any more to get public money.

“With the new economic and governance frameworks being implemented, there is a common realisation to ensure the systemic stability of the pension system and to ensure decent pensions for all citizens we need to move towards a three-pillar pension system.

“This brings us back to one of Europe’s biggest issues shifting our savings culture to a savings and investment culture. A European solution can guarantee each citizen a decent pension.”

She stated that educating ageing citizens in finance through pensions was also a way to develop their investment culture, highlighting the work of the Nordic countries.  

However, she pointed out that a "lot of little steps" would make a difference altogether and there was not one path to success.

Given this, she offered solutions for strengthening the EU economy through more convergence supervision and reviewing the securitisation framework. She also said developing simple and attractive European long-term savings products, building on new trends like digitalisation, and focusing on financial literacy could also help.

However, she said it would be "crucial" to draw experience from the failed implementation of the Pan-European Personal Pension Product before moving forward with a European long-term savings product.

In addition to this, Yon-Courtin argued: “If we want results in the longer term, we urgently need to rectify financial literacy now. We need public actors on all sides to incorporate this into the education system. But we also need private actors like insurers to be trustful and knowledgeable partners to their employees and their clients.”

Furthermore, she suggested that it would be key to build on new trends like digitalisation but warned that the downside and risk could not be overlooked in terms of consumer protection.

She said over the past five years, the industry has started to build a competitive and ambitious framework, highlighting the Solvency II Review which “bettered knowledge of sustainability risk”.

“If we achieved a lot with the last mandate, it is now about legislating with impact with the simpler, more effective and ambitious framework. Building the savings and investment framework will be teamwork. It is only together with legislators, supervisors, advisers, and finance stakeholders that we will build a new chapter of the EU,” she said.

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