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Three key messages are the following.
First, the current pension debate should be used by the Commission to foster increased coordination in pension reform. When discussing the sustainability of public finance, one medium-term objective could be to recognise unfunded implicit pension commitments.
Second, the prudential framework for pensions is bound to have far-reaching consequences, and it needs to respect the particularities of pension providers, which are not those of insurers.
Third, new regulation should encourage the generalisation of asset liability management practices, both for pension funds and individual retirement products, using the best available knowledge and techniques and evaluating micro- as well as macro-economic impacts.
A move towards hybrid pensions could, with these objectives in mind, provide a more adequate conceptual framework for European countries to converge towards. Only with those can the goals of adequacy, safety and sustainability for European pensions ever be met.