The EU pension’s landscape is in need of reforms as the percentage of the EU population covered by decent pension systems is too low, European Insurance and Occupational Pensions Authority chairman Gabriel Bernardino told the 9th European Pension Funds Congress, held in Frankfurt.

Bernardino pointed out the diverse nature of pension systems available in Europe with “pay-as-you-go, occupational and personal pension vehicles playing a very different role in the 28 member states. Irrespective of their differences, all these systems face the same challenges to their ability to deliver on their financial promises, which include longevity growth, a sluggish economic environment, low employment, budget deficits and debt burdens, low interest rates and volatility of asset values”.

“Changes to ensure the future sustainability of public pay-as-you-go, pension systems need to be accompanied by reforms incentivising the creation of funded complementary private schemes, be it second pillar occupational pensions or third pillar personal pensions,” he said.

“What is needed is a robust and proportionate EU regulatory framework capable of regaining the trust of EU citizens in private complementary pension savings. To achieve this, the regulatory framework must offer enhanced sustainability, strong governance and full transparency.

“Creating sustainable and adequate pension systems will be one of the major challenges for Europe,” he said, adding that, at the EU level, EIOPA would work to make sure EU citizens were well informed about their private pension schemes, get a fair deal and trust that promises made to them will be fulfilled.