Industry heavyweights stress importance of strengthening pension systems

The European Commission’s call for evidence on the Savings and Investments Union (SIU) has drawn responses from key industry players, highlighting the urgent need for pension reform, market integration, and regulatory simplification.

EFAMA, the European Association of Paritarian Institutions (AEIP), the Association of the Luxembourg Fund Industry (ALFI), and PensionsEurope have all submitted their recommendations, focusing on mobilising European Union savings, boosting investments, and fostering greater market efficiency.

PensionsEurope emphasised the importance of developing funded pensions across the EU. It called for the completion of the Capital Markets Union (CMU) and stressed the need for further actions to improve market integration and enhance cross-border investment efficiency.

PensionsEurope also highlighted the success of auto-enrolment in countries like the UK and Lithuania, urging the Commission to include this approach in its country-specific recommendations under the European Semester.

EFAMA’s response outlined four main areas for improvement, noting the need to mobilise EU savings more effectively by simplifying the investor journey, improving financial literacy, and boosting retirement savings.

EFAMA also called for making more investments available for EU companies, fostering greater market integration and efficiency, and prioritising greater supervisory convergence.

Vincent Ingham, EFAMA director of regulatory policy, said: “The EU stands at a crossroads, where the decisions we make today will impact our economic prosperity for years to come. There are clear regulatory changes and simplifications that policymakers can make to turn more savers into investors, provide more funding for EU businesses, and improve market efficiency and integration.”

He added that within an enabling regulatory environment, asset managers “can play a powerful role in the financial well-being of EU citizens and the success of the European economy”.

Push for pension reform

AEIP’s response underlined the potential of paritarian occupational pensions in securing financial retirement stability for European citizens. While specific details of AEIP’s recommendations were not provided, the association’s focus on occupational pensions aligns with the broader industry push for pension reform and increased savings mobilisation.

Simone Miotto, AEIP’s executive director, said: “Occupational pensions play an increasingly important role in securing financial stability for European citizens. The European Commission should encourage this positive trend by recognising the unique nature of these pension schemes. Since they are deeply integrated within national labour and social security systems, EU policies must respect national competencies and the diversity of pension systems across member states.”

Strengthening pension systems

ALFI focused on unlocking Europe’s savings and investment potential. The association highlighted the stark contrast between European and US household wealth allocation, with 41% of European household wealth held in cash and savings compared to just 16% in the US.

ALFI proposed a set of concrete actions, including mobilising younger generations through financial education and investment accounts for children, strengthening European pension systems, and introducing Investment Savings Accounts (ISAs).

The responses from these key industry associations highlight the complex challenges facing the European savings and investment landscape. As the European Commission considers these recommendations, the financial industry eagerly awaits the forthcoming SIU communication expected later today (19 March 2025).

With an ageing population and the need for sustainable economic growth, the success of the Savings and Investments Union initiative could have far-reaching implications for European citizens and the broader economy.

The industry’s united call for action underscores the urgency of addressing these challenges and the potential benefits of a more integrated and efficient European financial market.

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