European Policy Analysis Volume 2, Number 1, Spring 2016 | Page 44

Second Tier, Second Thoughts based 1st pillar elements, is by now widely cited as applying to 2nd and 3rd pillar products as well. The report is not without guilt in this regard, as it concluded very generally that “any restrictions to crossborder investments that impede efficient diversification impose a corresponding cost since they prevent investments that would allow higher returns for the same level of risks or lower risks for the same level of returns” (Oxera 2007). Even though this result is based on rather rigid ceteris paribus assumptions and is restricted to equity (as opposed to bond) markets (Oxera 2007), the Commission has worked toward lowering the said restrictions ever since—with little regard to the specific characteristics of national markets for occupational and private pensions (European Commission 2015a). These latter characteristics exist in an uneasy tension with DG GROW’s tendency to, while remaining rhetorically committed to the three-pillar model, divide the pension sector analytically (and politically) in only two basic categories: individual and group pensions. The latter are seen as obstacles to labor mobility, and as falling under the remit of member states’ social policies. The former, to the contrary, are constructed as integral parts of the single capital market. Hence—and here the DG is in line with an influential strand of the academic literature on the topic—occupational group pensions come under pressure to align themselves with one of the above (usually the individual side). Typical policy proposals in this line are to do away with employers’ direct management of pension pots, the coverage of biometrical risks, and provision for dependents (Hessling 2013). Social justice, it is argued, is to be established by the 1st pillar (and not its 1st pillar bis elements, for that matter) alone.8 So far, we can distinguish three major bones of contention in terms of both distributional and legitimatory conflicts regarding the establishment of a 2nd, Europe-wide regulatory regime: In how far would national taxation rules have to be adapted, that is, harmonized, in order to render such a standardized 2nd tier product reasonably attractive across member states? Which providers, for example, large insurers and pension funds, stand to profit from EU activities promoting such pension plans at whose expense? And which repercussions are to be expected for the balance of national pension systems as a whole, especially the public 1st pillars of pension systems and their tasks? The following analyses will be focused on these questions. (Furthermore, Section 4 will encompass an additional section of selected further topics.) 3. Theoretical Framework P olicymaking in times of crisis comes with some special characteristics. In crisis situations, political actors have to cope with many different challenges (cf. Wenzelburger and Wolf 2015). They face 8 Ironically, provision for dependents has in several EU member states been cut, not raised, within the public 1st pillar in the name of emancipation. Spouses and parents are thus either directed toward additional (private) life insurance—an additional boost for the industry, or they are intentionally or unintentionally being nudged toward inheritable assets such as real estate. 44