Insurance Europe, a trade federation that represents the European insurance and reinsurance industry, has called the proposal for an EU-wide single pension product “poorly designed”.
The remarks were made in response to the European Insurance and Occupational Pensions Authority’s (EIOPA) plan to create a pan-European personal pension product (PEPP). EIOPA’s proposal is part of its wider plan to create a single market for all financial retail products in the EU.
Despite welcoming the PEPP’s goals, Insurance Europe disagreed with several points of the proposal, saying these failed to take into consideration key product features needed to provide European citizens with tailored retirement solutions. It added that a poorly designed PEPP will not bring benefits to both consumers and the EU’s economy.
According to the group’s position paper: “For the PEPP to be a true long-term product, it must allow providers to generate long-term liabilities. This means that consumers should be incentivised to save for a long period, for instance with minimum investment periods.”
Additionally, Insurance Europe believes that the “same risks, same rules” principle must apply to ensure an equal playing field between all providers. EIOPA also plans to institute a cap on fees charged by insurance providers, but Insurance Europe disagreed with it, saying that companies should be allowed freedom in the spirit of competition.
“The PEPP’s costs and charges should not be capped, even for default investment option. Consumers have to be provided with clear and concise information as to the costs and charges of their products,” said Insurance Europe.
