Savings and Investments Union: Focus on Insurance and Pensions

The European Commission has adopted its strategy for the Savings and Investments Union (SIU). The SIU aims to create better financial opportunities for EU citizens while enhancing the financial system’s ability to connect savings with productive investments. This will provide savers with more choices to grow their household wealth and enable businesses across Europe to expand.

At the EU level, measures will be required to support competition and ultimately offer retail investors a broader selection of products that align with their preferences for retirement savings, investments, and insurance.

One key aspect of the strategy is the development of the supplementary pension sector, which includes two concrete policy measures:

1. Best practices and recommendations: By Q4 2025, the Commission will issue recommendations on the use of and best practices for auto-enrolment, pension tracking systems, and pension dashboards. These recommendations will highlight best practices and lessons learned from across the EU and encourage the development of such tools.
2. Review of existing pension frameworks: By Q4 2025, the Commission will review the existing EU frameworks for Institutions for Occupational Retirement Provision (IORPs) and the Pan-European Personal Pension Product (PEPP). The goal is to increase participation in supplementary pensions to ensure adequate retirement income and improve pension funds’ ability to channel household savings into productive and innovative investments.

The SIU strategy also focuses on promoting investment in equity and certain alternative asset classes. Institutional investors, such as insurers and pension funds, play a crucial role in the EU’s financial system but are generally less active in equity markets and alternative assets such as venture capital, private equity, and infrastructure.

To address this, by Q4 2025, the Commission will take measures to stimulate equity investments by institutional investors. Specifically:

• To facilitate equity investments by insurers, the Commission will specify eligibility criteria for favorable prudential treatment of long-term investments in equity under the Solvency II delegated act.
• For banks, the Commission will provide guidance on the use of favorable prudential treatment for investments under legislative programs.
• For pension funds, the Commission will clarify how such investments align with the prudent person principle enshrined in current legislation.
• In parallel, the Commission will work to remove any remaining undue barriers to equity investments by institutional investors.

Finally, the Citizens and Savings segment of the strategy emphasizes financial empowerment. The Commission will facilitate an agreement between Parliament and the Council on the Retail Investment Strategy. However, if negotiations fail to meet the strategy’s intended objectives, the Commission will not hesitate to withdraw the proposal.

Additionally, by Q3 2025, the Commission will adopt a financial literacy strategy to empower citizens, raise awareness, and increase participation in capital markets, fostering a more investment-savvy culture across the EU.