19 February 2014

EIOPA: Towards an EU single market for personal pensions

In July 2012, the European Commission (COM) requested the European Insurance and Occupational Pensions Authority (EIOPA) to provide technical advice on the prudential regulations and consumer protection measures needed to create a single market for personal pensions.

COM is convinced that pension funds need to be operated with high professionalism and skill. Research suggests that good governance is associated with increased returns. COM expects that the main issues to be dealt with at the early stage of the work should focus on the identification of common features of personal pensions, and establishing the regulatory and disclosure issues with regard to personal pensions.

Amongst EIOPA‘s findings, there is a need to specify uniform information requirements so that PPP holders can be better informed and protected, but also to promote cross-border accessibility. However, Member States need to have scope to develop additional information requirements to reflect specific considerations related to their domestic market. Consequently, prescriptive information requirements on core areas could be developed with the option for MS to augment these with additional requirements focused on addressing national considerations.

With regard to products, EIOPA acknowledges that there is a debate as to the desirable level of product standardisation. EIOPA recognises that as always there is a trade-off between product standardisation and product innovation. On the other hand, a higher level of standardisation will help in achieving the required critical mass in order to reduce costs and facilitate the consolidation of multi-pillar systems in many countries.

EIOPA, in line with the request from the COM, will provide advice on what legislative changes are needed in the areas of prudential law and the protection of personal pension plan holders (PPP holders) in order to create a single market for PPPs.

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