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