In an interview with Dutch news daily Het Financieele Dagblad (FD), Bernardino argued that a public discussion was necessary to avoid friction between the younger and older generations.
“Some generations getting privileges at the expense of others will not work well forever, and risks won’t just disappear by ignoring the issue,” the FD quoted him as saying.
Bernardino said benefit guarantees were a growing challenge for traditional pension funds in the current economic climate, with those in Germany being a case in point.
Under German law, it is nearly impossible to make changes to pension benefits members have already earned based on their number of work years. Employers have argued that they suffer as a result of this.
Pensionsfonds were given some flexibility to relax minimum guarantees under what has become known as the Lex Bosch law.
More recently, the German government has proposed a pensions reform that would introduce industry-wide pension funds without guarantees, either within existing schemes or new vehicles to be set up by social partners.
Addressing the Dutch pension sector’s objection to having to apply low discount rates for liabilities, EIOPA’s chairman said low rates were “just reality”.
Bernardino, however, sought to put the problems of the Netherlands into perspective by noting that many other countries, contrary to the well-funded Dutch pensions sector, lacked private pensions, adding that “Europe is facing an enormous pensions deficit”.