Brussels wants to boost private pensions to "complement" public ones.

BrusselsBrussels warns of the aging European population and the weakening of pension systems in several EU member states. In this context, far from strengthening public sector pensions, it advocates for... to promote private pension plansBoth personal and professional. The European Commission, in a statement this Thursday, defends this as a way to "supplement" the pensions that Europeans receive from their national governments, which are often "insufficient."

This is not a new intention, nor is it a legislative proposal that could ultimately force EU countries to change their regulations and pension systems. Brussels acknowledges that this is the exclusive competence of the member states, so it remains in the realm of recommendations. In fact, the Commission points out that there are already member states where private pension plans play a very significant role—much more so than, for example, in Catalonia—and that it wants to respect the specific circumstances of each country in this regard. In any case, it is a way of reiterating its support for what has always been a priority for the European Commission: promoting pension plans managed by private entities.

In this regard, the European Commission is asking national governments to facilitate the creation of private pension plans and make their citizens aware that they will likely need a "supplement." How? One way is to keep them informed about their expected pension based on their current contributions or, alternatively, to promote sectoral agreements that open a professional pension plan for workers as soon as they join a company.

Furthermore, Brussels has also announced the introduction of legislative reforms to "modernize" and improve the legal framework for "supplementary pensions." "The review improves the protection of savers," the European Commission stated in its press release.

Boost investments

The European Commission asserts that in "many cases" public pensions are not "sufficient" to "maintain adequate living standards," especially for the most vulnerable and women. "The gender gap between men and women [in pensions] remains at 24.5%," Brussels reports. Therefore, it advocates for private pensions as almost a form of social protection, particularly for those who have contributed the least. Furthermore, it emphasizes that pension plans "can also contribute to European economic growth and competitiveness" because they "mobilize significant savings" which, managed by private companies, can be allocated to "productive investments."