Revision rights: EU does not do enough to secure citizens’ pensions

The EU has not done enough to support the development of supplementary pensions for European citizens.

This is concluded by the European Court of Auditors, which is tasked with auditing the EU’s finances, in a new report.

According to the Court of Auditors, it is problematic that the EU does not support supplementary pension schemes more, as the European population is aging, and more people therefore need a larger pension savings.

“In EU economies with demographic and fiscal challenges, supplementary pensions should play an increasing role,” says Mihails Kozlovs, who is the member of the Court of Auditors responsible for the report, at a press conference.

Supplementary pension is a pension that citizens can receive in addition to the regular state pension.

“Unfortunately, neither employer-funded pensions nor EU-wide personal pensions have lived up to expectations, especially regarding cross-border activity. Extra steps must be taken to strengthen these schemes,” says Mihails Kozlovs.

The Court of Auditors points out that neither the European Commission nor the European Insurance and Occupational Pensions Authority (Eiopa) has done enough to ensure that occupational pensions play a stronger role in the member states.

Occupational pensions do not function as expected across borders but are primarily widespread in a few countries, the Court of Auditors concludes.

The authorities have also failed to make the pan-European personal pension product (Pepp) a success.

Pepp is a voluntary pension scheme across EU countries. It is intended to help Europeans transfer their pension when they change jobs to another EU member state.

The scheme was introduced in March 2022. According to the Court of Auditors, the uptake of the scheme with under 5000 savers remains “extremely low.”

Furthermore, the Court of Auditors criticizes that there is not enough transparency for European citizens regarding their pension savings.

The criticism states that individuals cannot get an overview of their state pensions, occupational pensions, and personal pensions. This can make it difficult for citizens to calculate their future income in retirement.

Additionally, according to the Court of Auditors, there is a lack of full transparency regarding information on the costs and returns of pension funds. Eiopa should have improved this.