Insights

In July 2012, the European Commission requested EIOPA to provide technical advice on the consumer protection measures and prudential regulations needed to develop an EU Single market for personal pension products; including both defined contribution and defined benefit.

Following a consultation process with industry stakeholders, EIOPA has published its Preliminary Report “Towards an EU Single Market for Personal Pensions” that lays down the foundation for future EU initiatives.

EIOPA’s understands that taxation, social law and difficulties in the area of harmonisation of contract law seem to be the most significant hurdle to creating an EU single market for personal pensions. Nonetheless, EIOPA supports the introduction of both a Directive and/or a Regulation to maximise scale economies, increase competition in the marketplace and deliver high-quality solutions to beneficiaries.

EIOPA’s Preliminary Report outlines that the Directive should establish common EU consumer protection rules for all existing and future personal pensions. It should cover transparency and information disclosure, distribution practices, professional requirements and product governance arrangements in a manner similar to the IORP Directive.

The Regulation could provide an alternative or parallel framework to the Directive, facilitating further the development of an EU single market for personal pensions. The regulation should be designed in a manner that accommodates the tax and other differences among Member States. In EIOPA’s view, the Regulation could enable transferability of accumulated capital and highly standardised product rules ensuring a high level of protection for personal pension holders.

EIOPA has stated that its stands ready to assist the European Commission in any of its future work on developing an EU single market for personal pensions. EIOPA’s Preliminary Report can be accessed by clicking here.