Brian Hayes today said that the development of a pan-European personal pension product could provide valuable benefits for consumers who want different options to save for their retirement.
“Last week the EU’s pension authority body started a consultation process with the pension industry to examine how a pan-European pension product could be developed.
“If they get this right, a pan-European pension product could provide valuable benefits for consumers and for the stability of the EU’s financial system. A pan-European pension product would not be the silver bullet to Ireland’s pension time bomb. But it would give consumers different investment options for retirement savings and could encourage citizens to develop their future.
“In Ireland, only 41% of the working population is covered by a private pension scheme, whether that is a workplace pension or a personal pension. About 900,000 private sector workers currently have no private pension plan in place and will be looking at the contributory state pension to provide for them in retirement.
“We should be looking to countries like Netherlands where about 90% of the population is covered by private pension schemes. In the Netherlands, although there is no general obligation to be a member of a workplace pension scheme, there is a system in place where there is mandatory participation in certain sector-wide pension schemes. This has led to a situation where pension assets in the Netherlands are worth about 130% of GDP. In Ireland pension assets are worth just over 40% of GDP.
“This is why the EU is trying to develop different solutions, including a pan-European pension product. Really, everyone should be able to buy products from wherever they want in Europe – that’s why we have an internal market.
“A pan-European pension product would ensure that there is a level playing field for all pension providers across Europe and it would remove barriers for people who want to avail of pensions in different countries. Consumers would be able to shop around and get value-for-money products.”