European Policy Analysis Volume 2, Number 1, Spring 2016 | Page 55
European Policy Analysis
Topic 3: New (Im-)balances between the
Pillars?
nudge. A similar effect with disputable
legitimacy could be expected if EIOPA
indeed followed through on its ambition
to put “PPP members […] in a position
to select products characterized as good
“value for money” (EIOPA 2014b).
Here, EIOPA is apparently tempted to
overburden the drive for transparency
about PPPs’ costs that in itself is backed by
virtually all stakeholders (in their answers
to questions 27, 56 and 58 from EIOPA
2013). Of course, as of today the actual
costs to consumers are often hidden,
especially in plans based on rather activist
trading with relatively high and/or highfrequency portfolio turnover. Yet, as EIOPA
acknowledges elsewhere (EIOPA 2014b),
neither costs and real returns nor past
returns and future returns are necessarily
systematically linked. Thus EIOPA’s quest
for more and better customer information
is in danger of losing legitimacy when it
is coupled with unaccomplishable claims
about naively simple recommendations to
buyers.28
Nearly all general comments given
by stakeholders which refer to the pillar
metaphor either cling very rigidly to certain
aspects of it or question its future viability
altogether. Within the former group,
representatives of occupational pensions
tend to fend for a broad definition of the 2nd
pillar and a narrow mandate that restricts
EIOPA’s PPP activities to few aspects of
the 3rd pillar. In this mould, the German
working group on occupational pensions
(Arbeitsgemeinschaftbetriebliche Altersversorgung, aba) emphasizes that the
specific characteristics of prevalent
PPP products in EU member states
correspond with the respective designs of
the 1st and 2nd pillars there. Therefore,
it urges EIOPA to strictly restrict its PPP
initiative to providers “who currently are
not covered under any EU Directive and
work to close these gaps” (EIOPA 2014a,
gen. com. 4; also cf. gen. com. 14 by the
German Insurance Association).29 The
UK National Association of Pension
28
In the discussion of a question pertaining to our following third topic, EIOPA’s strong confidence in
customer information was also challenged. Question 29 reads: “What key questions identified in the
area of occupational pensions (‘Will my pension be sufficient for my demands and needs? If not, how
much will the shortfall be and what can I do to improve the situation?’) might be relevant for personal
pensions?” (EIOPA 2013) Insurance Europe remarked in its answer that “the question in parentheses
could not be answered by providing customer information”, but required “a thorough assessment of the
personal situation” (EIOPA 2014a, com. 621).
29
Even more restrictive (and potentially self-serving) is the role Pensionskasse der Mitarbeiter der
Hoechst-Gruppe, a German occupational pension provider, envisages for EIOPA. In their eyes, it
should primarily advertise 2nd pillar products in markets where it is underdeveloped. The introduction
of a 2nd tier PPP, “[o]n the other hand, […] would lead to a fragmentation in the area of supplementary pensions going hand in hand with an increasing confusion and insecurity of the citizens on the
selection-process of one or several supplementary schemes. At worst, such confusion and insecurity
will lead to a declining coverage ratio of all supplementary pension schemes and would therefore run
counter to the objectives pursued by the European Commission to avoid old-age poverty and to ease
the public pension sector(s)” (EIOPA 2014a, gen. com. 24). Furthermore, this stakeholder worries
about potential “regulatory arbitrage at the expense of the individual/insured persons” (ibid.) if EIOPA’s
role as a pan-European regulator were strengthened.
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