FESE Position Paper on the European Commission supplementary pensions Package

FESE welcomes the European Commission’s supplementary pensions package, as a key building block of the Savings and Investments Union (SIU), with the potential to mobilise long-term savings, improve retirement outcomes, and channel capital into the European economy. Strong supplementary pension frameworks can broaden participation in capital markets while providing stable, long-term financing to support growth and competitiveness.

In this context, FESE has published its position on the Commission’s package, and supports its overall direction and objectives. We call for a more attractive, scalable and flexible EU supplementary pensions framework that boosts participation through measures such as auto-enrolment, enhances cross-border integration, and channels long-term savings into transparent, well-regulated capital markets to support economic growth.

Our paper focuses on the following main elements:

1.PEPP review

The PEPP framework is positioned as a simple, accessible and scalable cross-border savings product. We welcome the Commission’s proposed review, in particularly the preservation of the PEPP’s core features and efforts to address barriers to uptake. The move towards a Value for Money approach can enhance its viability provided that it appropriately reflects performance and qualitative considerations alongside costs.  A strong emphasis is placed on directing investments predominantly through transparent trading venues, reinforcing liquidity, price discovery and investor protection. We support a framework that establishes wider uptake through clear and accessible information for savers, diversified portfolios with greater equity exposure, flexible application of the prudent person principle, easier transferability between products, and aligned tax treatment.

2. IORP II review

A more flexible, principles-based framework under IORP II allows occupational pensions to broaden their investment strategies, including participation in capital markets and alternative assets, while maintaining appropriate safeguards. FESE supports the proposed shift towards greater investment flexibility and the strengthening of governance and transparency requirements as part of the IORP II review. Mobilising pension savings towards EU markets is closely linked to targeted incentives and a stronger focus on equity investment. To support deeper market integration, there must be measures to increase scale and efficiency. Over time, further steps towards an EU-level passporting approach could help reduce fragmentation and improve capital allocation across Member States.