FESE response to the EIOPA Call for Evidence on Defined Contribution (DC) pensions toolkit

FESE submitted its response to the EIOPA Call for Evidence (CfE) on Defined Contribution (DC) pensions toolkit.

Key recommendations:

• Transforming EU pension products into a “European 401(k)”, modeled on U.S. employer-sponsored retirement plans. Employees could contribute part of their salary with tax advantages, while retail savers would gain the freedom to directly invest in shares and bonds through intermediaries. This would combine workplace retirement savings with greater investor choice and flexibility.
• Investors should be offered a broad range of products that reflect their individual risk tolerance and return expectations. This means that both products with lower risks (especially towards the end of the accumulation phase) and products with greater opportunities should be offered.
• The Swedish approach to implementing Pillar 2 auto-enrolment, via collective agreements and engagement with social partners, could be a good model that can deliver efficiencies, lower fees, and facilitate the attainment of critical mass.
• The importance of transparency for end investors should be emphasised, particularly through accessible information on investment strategies and costs. This is particularly important when their savings are allocated to assets that are not traded on transparent regulated markets.
• Offering occupational pension schemes to specific groups would be beneficial but will be difficult to achieve in practice. However, it is crucial that every citizen has access to pension products.