1. Working for pensions in Europe Ms. Chris VERHAEGEN, Secretary General EFRP FIAP International Conference 31 May 2007, Varna

2. 2 Key messages 1.EFRP is the European industry representative focussing on funded and workplace pension provision 2.EU-enlargement with 12 MS has increased diversity in EU pension systems 3.Europe should reflect on a “European pension model” combining EU-15 and EU-12 systems

3. 3 The EFRP 29 Member Associations 16 EU Member States (EU-15 – EL) + HU + SK 5 non-EU (CH, Guernsey, HR, IS, NO) Core Membership : funded and workplace pension providers Representative organisation with EU institutions, OECD and IOPS 75 million EU citizens rely on EFRP members for their supplementary retirement income - Total assets managed = 3,6 trillion Euro (2005)

4. 4 EFRP Mission Statement EFRP stands for: Affordable pensions for large sections of the population helping to maintain living standards in retirement that provide a degree of intra- and inter-generational solidarity and, which are administered through funding institutions which can benefit from a European passport taking into account: the principles of subsidiarity and national diversity

5. 5 EFRP key partner in EU A partner for: contacts with industry representatives across EU influencing EU decision making obtaining selected EU-level information delivery of in depth analysis on some key issues for private pension providers

6. 6 Common challenges in the EU All Member States face similar challenges: –Ageing societies –Budgetary deficits in MS –Low economic growth –Rigid national labour markets –Globalisation EU is developing, within its competence, a policy mix, affecting public and private pensions EU-27 pension modelling is needed

7. 7 EU-15 multi-pillar model Social assistance programmes for the elderly FirstMandatory – PAYG - publicly financed and managed SecondOccupational pension - linked to paid work - usually organised as group schemes set up in the framework of a company, a group of companies or of sectors of industry or professional groups ThirdVoluntary individual savings for retirement

8. 8 EU-15 multi-pillar model in reform Social assistance programmes for the elderly FirstMandatory – PAYG - publicly financed and managed Funding elements (DK, SE, FI) + demographic funds + increasing retirement age SecondOccupational pension - linked to paid work - usually organised as group schemes set up in the framework of a company, a group of companies or of sectors of industry or professional groups Personal Pensions (UK) - PRSA (IE) – Riester (DE) + shift away from DB to DC ThirdVoluntary individual savings for retirement

9. 9 EU-12 (NMS) multi-pillar model Social assistance programmes for the elderly FirstMandatory – PAYG - publicly financed and managed PL- LV → notional defined contribution systems (NDC) SecondMandatory funded individual accounts operated by private pension management companies ThirdVoluntary funded individual accounts (occupational and individual)

10. 10 EU-27: Divergence → convergence EU-15EU-12 Social assistance programmes for the elderly 1 st pillar – State pension 2 nd pillar mandatory 3 rd pillar voluntary 2 nd pillar occupational 3 rd pillar individual EU-27 2nd pillar 3rd pillar PRIVATE STATE PAYG FUNDED

11. 11 EFRP Proposal EU-27 pension pillar terminology (1) Social assistance programmes for the elderly 1 st pillar – State pension 2nd pillar - workplace 3rd pillar – individual PRIVATE STATE government company level Acknowledge and consistently label product diversity – who is designing the scheme social partners MandatoryVoluntary PAYG FUNDED

12. 12 Key messages 1.EFRP is the European industry representative focussing on funded and workplace pension provision 2.EU-enlargement with 12 MS has increased diversity in EU pension systems 3.Europe should reflect on a “European pension model” combining EU-15 and EU-12 systems

13. 13 Contact EFRP Koningsstraat 97 rue Royale 1000 Brussels Belgium Tel.: +32 2 289 14 14 Fax: +32 2 289 14 15 efrp@efrp.org www.efrp.org