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Speaking at the European Insurance and Occupational Pensions Authority’s annual conference in Frankfurt, the supervisor’s chairman said any such framework would be able to reduce costs by operating on a cross-border level. “At an EU level, while recognising the high sensitivity around pensions discussions, a further important step would be to design a simple and transparent EU framework for defined contribution occupational schemes. This framework should be capable to take full advantage of the potential of the EU internal market by providing a cross-border platform that would reduce costs, support long-term funding of the EU economy and ultimately deliver better pension outcomes.”
The chairman’s comments come after PensionsEurope released a paper outlining key design principles for what it regards as modern DC, focusing on member behaviour, adequacy of the accrued pension pot’s size and risk-sharing. Bernardino also suggested new tools might be needed to ensure constructive dialogue between social partners involved in defined benefit (DB) funds, and that DB was becoming “more and more a legacy issue”
“There is a need to build appropriate incentives for a proper dialogue between employers and employees on their long-term sustainability,” he said. However, not wishing to underplay the importance of properly valuing liabilities, he added: “This important dialogue should not be based on valuations and risk assessments that deny economic reality.
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