The European Commission’s pension package, which outlined legislative changes and a series of recommendations for the sector, has been tentatively termed a “positive development”, but PensionsEurope has stressed that the EC should avoid a “one-size-fits-all” approach.

Indeed, PensionsEurope chair, Klaus Stiefermann, said it is too “early to fully evaluate the new package” but said it comes at a time that “statutory pensions are challenged due to demographics more than ever”.

He added that aspects of the proposals, which include amendments to the IORP II Directive, the Pan-European Personal Pension Product (PEPP) regulation, and clarifying the prudent person principle, “need to be further analysed and evaluated to be sure that they are fit for purpose”.

“PensionsEurope stresses that pension funds are long-term investors with the primary objective of delivering adequate pensions to their members and beneficiaries. For this reason, pension funds need a well-designed regulatory framework to function properly.

“In the European Union, pensions are based on unique cultural, historical, and political factors, and are deeply rooted in national social, labour, and tax laws. For this reason, it is vital that any EU initiative for pensions must take into consideration the existing diversity, subsidiarity, proportionality, and avoid a one-size-fits-all approach.”

His colleague, PensionsEurope secretary general, Matti Leppälä, said emphasis should be placed on “maintaining well-established pension systems”. In particular, he highlighted member states that have a long tradition of social partners’ engagement.

The association is also “generally supportive” of the EC’s non-legislative recommendations, which include pension tracking systems, pension dashboards, and auto-enrolment into supplementary pension schemes.

“In addition, existing EU policy tools such as the European Semester can and should be used to support and encourage member states to develop and keep well-funded pensions,” Leppälä added.

On the legislative proposals, he said the proposed changes to IORP II “need to take into consideration the national specificities and the characteristics of the sector”.

He continued: “PensionsEurope is supportive of having a workable new PEPP framework which can increase pension coverage in countries with no well-established supplementary pension structures. However, existing structures need to be respected and remain undisruptive.

“PensionsEurope will continue to engage with policymakers on the relevant issues in the process of the upcoming ordinary legislative process in the coming months.”

Furthermore, the Cross-Border Benefits Alliance Europe (CBBA-Europe), an advocate of cross-border pensions across Europe, considers the “proposed reforms to IORP II and the PEPP framework very positive”, according to its secretary general, Francesco Briganti.

“The simplifications and speeding-up of cross-border procedures, together with a stronger role for the European Insurance and Occupational Pensions Authority (EIOPA), could finally relaunch cross-border pension activity.

“On the PEPP, we appreciate that the main obstacles to the product’s development have been addressed, and we strongly support the move to a life-cycle strategy without guarantees. We also welcome full portability between PEPPs and national personal pension products, as well as the inclusion of non-discriminatory tax treatment directly in legislation,” he said.

Briganti said that his association had initially hoped that the commission would design a fully occupational PEPP to use in workplaces, but the association “understands the commission’s choice to position it as a complementary solution to the (existing) occupational pensions, capable of filling coverage gaps”.

Representing the investment side of the financial sector, European Fund and Asset Management Association (EFAMA) director general, Tanguy van de Werve, took a positive stance as he said the EC’s initiative to address Europe’s widening pension gaps is a “much-needed one” due to a “ticking time-bomb on retirement security”.

He added: “Their promotion of AE, life-cycle investment strategies, and tax incentives can help savers build adequate pension income, while pension trackers increase transparency and awareness. We rely on member states to implement these measures as a priority going forward. Done right, these measures will play a central role in securing sustainable retirement savings for all Europeans.”

However, EFAMA regulatory policy adviser, Kimon Argyropoulos, warned that linking the value-for-money provisions for the proposed Basic PEPP to the benchmarking methodology developed under the Retail Investment Strategy – a framework that is yet to be established – “risks introducing untested and potentially complex requirements that could distract from the more immediate task of creating a viable PEPP market”.

Meanwhile, BetterFinance, the association for the retail side of the financial sector, stressed that the “devil is in the detail” but it believes that the proposed reforms to the PEPP could make retirement savings “simpler, more transparent, and potentially more cost-efficient for millions of Europeans”.

BetterFinance managing director, Aleksandra Mączyńska, said: “Retail investors could finally access a pension product that is suitable by design, easy to understand, and aligned with their long-term interests.”

Germany’s Deutsches Aktieninstitut (DAI) also offered its reaction, in which it said the pension package was a “wake-up call for member states”.

DAI managing director, Henriette Peucker, added: “Germany has a lot of catching up to do. The task now is to pass the reform of private pension provision with the introduction of a pension savings account in the Federal Cabinet as quickly as possible.”

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