The EU hopes its much-hyped portable private pension will address a
dangerous shortfall in retirement savings. But as demographic issues
differ between member states, experts question why Brussels is taking
the lead.
Just before EU institutions broke up for the summer, the European Commission (EC) announced wide-ranging proposals for a Pan-European Personal Pension (PEPP) to boost old age savings. The voluntary scheme will allow some 240 million working age adults to contribute to private savings accounts that will be fully portable if they choose work in other EU states.
PEPP is meant to supplement the state pension provision as well as retirement schemes offered by employers. With the likes of Germany, Britain, Spain and Greece facing huge deficits in their private and public pension schemes, Brussels believes the proposals will help plug the retirement gap and at the same time, create a bigger market for financial services providers to operate.
Last year, accountancy firm Deloitte estimated some 2 trillion euros ($2.4 trillion) per year is needed to address the pensions savings shortfall across Europe, which is unlikely to come from individual member states. It warned that Ireland and Spain had seen the biggest increase in the pension savings gap over the previous six years, and that Germany was the largest at 461 billion euros. The Deloitte research was commissioned by insurance giant Aviva.
As Europe returns to work and gets a chance to digest the plans for PEPP, some academics are skeptical about whether the proposals will offer better returns for workers and if the new pension products will increase the overall level of retirement savings, which is one of Europe's most pressing
Read more: Can new EU-wide pension help savers dodge retirement crisis? | Business | DW | 08.09.2017
Just before EU institutions broke up for the summer, the European Commission (EC) announced wide-ranging proposals for a Pan-European Personal Pension (PEPP) to boost old age savings. The voluntary scheme will allow some 240 million working age adults to contribute to private savings accounts that will be fully portable if they choose work in other EU states.
PEPP is meant to supplement the state pension provision as well as retirement schemes offered by employers. With the likes of Germany, Britain, Spain and Greece facing huge deficits in their private and public pension schemes, Brussels believes the proposals will help plug the retirement gap and at the same time, create a bigger market for financial services providers to operate.
Last year, accountancy firm Deloitte estimated some 2 trillion euros ($2.4 trillion) per year is needed to address the pensions savings shortfall across Europe, which is unlikely to come from individual member states. It warned that Ireland and Spain had seen the biggest increase in the pension savings gap over the previous six years, and that Germany was the largest at 461 billion euros. The Deloitte research was commissioned by insurance giant Aviva.
As Europe returns to work and gets a chance to digest the plans for PEPP, some academics are skeptical about whether the proposals will offer better returns for workers and if the new pension products will increase the overall level of retirement savings, which is one of Europe's most pressing
Read more: Can new EU-wide pension help savers dodge retirement crisis? | Business | DW | 08.09.2017
