Supplementary pensions should support, not replace, public systems

The European Economic and Social Committee warns that expanding supplementary pensions must not weaken public pension systems. In recommendations to the European Commission, it calls for a balanced approach that strengthens both systems. Adopted in April, the EESC’s opinion supports the development of workplace and personal pension schemes, but stresses that they must remain complementary to public pensions. It calls for action at both national and European level to improve labour markets, reinforce public systems and increase trust in additional pension savings.

As Europe faces ageing populations, pressure on public finances and growing investment needs, the Commission has proposed reforms to boost supplementary pensions. These include changes to the pan-European personal pension product and to the rules for workplace pension funds. The aim is to improve retirement income while channelling more private savings into the economy.

The EESC supports these goals but insists that adequacy, security and trust must come first. ‘Supplementary pensions can play an important role, but they must complement, not weaken, public systems,’ said María del Carmen Barrera Chamorro, the rapporteur for this opinion. ‘The priority must remain clear: ensuring that everyone can retire with dignity, security and an adequate income.’ The EESC President, Séamus Boland added that ‘We appreciate the active and particularly constructive cooperation with the European Commission and other stakeholders during preparatory work, on a topic that is complex, politically sensible, and with diverse views and ambitions.’

The opinion was discussed at a high-level debate with Maria Luís Albuquerque, European Commissioner for Financial Services and the Savings and Investments Union, Elma Saiz Delgado, Spain’s Minister for Inclusion, Social Security and Migration, and Damian Boeselager, Member of the European Parliament. 

Elma Saiz Delgado said that ‘Any supplementary pension schemes must be based on the principle of complementarity. Under no circumstances should they replace the state pension system. A balance must be struck here so that the development of supplementary pension schemes does not replace our responsibility to ensure adequate provision for pensioners. This must be consistent with the Pillar of Social Rights.’

Improving access and trust

In its opinion on the supplementary pensions package, the EESC calls for supplementary pensions to be easier to access and understand, especially for people who are currently not covered. It recommends clearer rules, better information for savers and stronger safeguards. This includes clearer advice when choosing pension products and stronger supervision at European level. Financial education and simple tools are also needed to help people understand their rights and make informed decisions.

At the same time, reforms should reflect the diversity of national systems and be agreed with employers and trade unions. A single approach for all countries would not work.

Reducing inequality

The opinion highlights major gaps in supplementary pensions, especially between men and women. In some cases, women receive up to 40% less from private schemes.

The EESC calls for targeted measures developed through dialogue between employers and workers, to reduce these gaps and improve fairness. Pension reforms should also help tackle poverty and inequality more broadly.

Supporting investment without raising risks

Supplementary pensions can help finance long-term investment in Europe. The EESC supports this role but warns against taking too much risk with people’s savings.

It calls for a careful balance between returns and security, ensuring that pension savings remain protected.

Strengthening the role of the social partners

The EESC stresses the importance of involving employers and trade unions in pension reforms, especially for workplace schemes. Measures such as automatic enrolment should be introduced by agreement between these groups.

It also calls for a European monitoring system involving the social partners, to assess how reforms affect retirement income, inequality and poverty.

Commissioner Albuquerque welcomed the EESC’s input and explained that ‘supplementary pensions are the way to help people build additional security over the long term and to support them in retirement. This is the spirit behind the European Commission’s supplementary pensions package. We fully respect Member States’ competences and the central role of social practices. Our objective is to support shared practices and to help create the conditions or solutions that work for citizens.’

Contact: thomas.kersten@eesc.europa.eu