A pan-European pension tracking service will take six years to break even and initially be reliant on grants from the European Commission, the venture’s final business plan shows.

Unveiling its last business plan after more than a year of intensive work, the TTYPE Consortium – short for Track and Trace Your Pension in Europe – said it envisaged the staged rollout of a European tracking service (ETS), beginning in countries with existing national tracking services (NTS) and significant cross-border worker flow, with initial costs of €13.3m across the three-stage launch.

The first step of the process would be for a proof-of-concept to be trialled in the Netherlands and Belgium, eventually being deployed across the Scandinavian countries and Poland.

The second step would see the ETS rolled out across countries neighbouring the seven initial participating member states already in possession of an NTS, such as Latvia and Estonia.

The business plan also proposed including Lithuania, which does not currently have an NTS but would be included at this stage due to the small number of local pension providers in need of connection.

“Connecting Austria (which has an NTS) and its direct neighbours (which do not have an NTS but have a small number of data providers) will expand the nucleus that started by connecting Poland in Step A,” the business plan adds.

“Similarly, connecting the NTS of France will increase the area that started with the [national tracking services] of Belgium and the Netherlands.”

Eventually, the remaining European Economic Area countries would also be connected to the ETS.

ETS cost

In line with the draft business plan published earlier this year, the per-member cost of the ETS was estimated at €0.03, which the consortium estimated would produce revenue to finance the not-for-profit managing entity, STEP, of no more than 10% of that produced by existing NTS.

“If all estimated 280m Europeans (within the age range of 25-65) are connected, this should generate enough revenue (and, in time, a lower fee),” the business plan adds, without estimating the likelihood of such a high uptake.

It also called on the European Commission to support the project financially.

In a letter sent to Marianne Thyssen, commissioner for social affairs, to coincide with the report’s publication, Peter Melchior, chairman of the TTYPE steering committee of Denmark’s PKA, calls for Commission funding.

“We calculated that, after the deduction of membership fees [of €3m], approximately €17m is needed in the first five years to cover the costs of developing, connecting and running the ETS,” Melchior writes.

“We therefore strongly recommend the European Commission grant substantial financial support.”

Melchoir also urges various stakeholders to build on the goodwill built up since the TTYPE Consortium first gathered and push ahead with the launch of the ETS.

“Among parties in Europe, there needs to be enough willingness and executing power to step in and do this,” he writes.

“The risk here is losing time and momentum. Political and financial support from the EC for future years is a prerequisite. Without sufficient EC support, STEP will not be able to realise its goals.”

Speaking at the TTYPE launch event, Thyssen said the Commission was politically committed to the project and would aim to supply funding for the first step of the ETS connecting the Netherlands and Belgium – estimated in the business plan to cost €3.3m.

She added that the Commission would later this year also tender for a provider to launch the ETS. 

The TTYPE consortium – comprising Danish pension provider PKA, Dutch providers PGGM, APG, MN and Syntrus Achmea and the UK and German construction-sector funds B&CE and SOKA-Bau – has been working on the plan since March 2015.

Topics