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These are very important objectives to pursue in light of the financial crisis and its impact on public finances, the implications of ageing on future public spending, and the expected fall in replacement rates (pensions relative to previous earnings).
Action is also needed to help individuals in obtaining the highest possible return on their pension savings consistent with their financial capacity and risk profile. Standing in the way of this is the extreme fragmentation of the pensions market in Europe, which has resulted in limited choice, access and innovation, as well as higher costs for investors.
EFAMA sees the development of a single market for pan-European pension products and a level playing field, both leading to lower costs of pension provision and higher returns, as a possible way out. It would also make supplementary pensions more compatible with the requirements of flexible labour markets and job mobility.
From this perspective, EFAMA fully supports the Commission’s proposal to facilitate the cross-border distribution of certain private pension products. EFAMA thinks the most promising initiative would be to create an EU certification scheme to guarantee that such products comply with high-level information, transparency and safety standards. The concept of the “Officially Certified European Retirement Plans” (OCERP) as proposed by EFAMA, offers a basis for undertaking discussions on a set of unified standards.
Claude Kremer, President of EFAMA, said: “EFAMA is committed to assist the European Commission in its efforts to address the current pension challenges, enhance the role of complementary private retirement savings and overcome the obstacles to the design and cross-border distribution of pension products. As a concrete step forward, we will organise a “Pension Day” in April to stimulate a debate on what could be done to strengthen the quality of financial products for individual retirement savings and improve information to be given to members and beneficiaries of defined-contribution schemes.”