Gregor Asshoff, chief investment officer of SOKA-BAU, one of the largest pension funds in Germany with over €14bn in total assets, has warned about a pension policy of the next European Commission looking closely at third pillar private pensions, while the second pillar system remains in the background.
“I worry that, slowly but steadily, we will be in a situation similar to the US, where the third pillar is pushed further to the foreground and the second pillar [is pushed] back”, Asshoff said.
Occupational pensions are “predestined” to help spread supplementary retirement provisions to a broader public and employees, possibly to self-employed, the CIO said referring to a mission letter sent by the Commission’s president, Ursula von der Leyen, to Maria Luís Albuquerque, designated commissioner for financial services and the Savings and Investments Union.
Albuquerque’s mission letter, a policy roadmap, points at the potential of private occupational pensions to support a stronger EU Savings and Investments Union, he added during a recent event in Brussels.
“It is not about strengthening the third pillar at the cost of the second, or the third and the second [pillars] at the cost of the first,” Asshoff noted.
“We want of course the public pension systems to continue, they are a distinguishing feature in Europe. They have to remain so, and we encourage member states to work to reform the state pension systems,” said Marcel Haag, director, horizontal policies, directorate-general for financial stability, financial services and Capital Markets Union at the Commission.
The biggest challenge ahead is to increase participation of savers in the Capital Markets Union – now known as the Europe Savings and Investments Union – based on Enrico Letta’s report, which is on top of the list of Albuquerque’s mission letter, Haag added.
In this context the development of pension and long-term saving products is of “outstanding importance,” he said.
European Union members of parliament (MPs) are set to press Albuquerque on the project of developing a ‘Savings and Investments Union’ at a hearing planned for 4 November.
The Commission wants to first explore what is possible to achieve on pensions by engaging with member states.
“In the majority of [EU] countries with successful long-term savings and pension products there is a tax component, and we need to talk with member states about leeways [available]. We have started with the consultations but we want to do our homework first, the colleagues in the directorate general are fully involved [in the process],” Haag said.
Rainer Riess, director general of the Federation of European Securities Exchanges (FESE), underlined during the discussions that broad support for occupational pensions across the Commission is necessary to build a strong capital markets and savings union.
He pointed to the mission letter of executive vice president for people, skills and preparedness, Roxana Mînzatu, lacking a reference to pensions.
Private and occupational pensions, which fall under the remit of member states, are essential to amass capital in the union, but unfortunately member states seem to shy away from joining forces, Riess said.
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