Capital Markets Union: Commission publishes new findings on how “auto-enrolment schemes” can boost citizens’ retirement income

Today, the Commission published a new study that investigates the performance of so-called “auto-enrolment mechanisms” in pension schemes in a number of EU and non-EU countries. “Auto-enrolment mechanisms” automatically sign individuals up to a pension plan, while giving them the chance to opt out. These schemes allocate pension savings in pension funds that invest in European and global capital markets to generate long-term returns. This contributes to more adequate pension income for EU citizens. Using findings from case studies, interviews and experts meetings, the study identifies a list of best practices for the successful introduction of auto-enrolment schemes. The study is a follow up to the 2020 CMU Action Plan, which aims at offering greater access to capital markets and investment opportunities for European savers, meanwhile contributing to important social goals (such as pension adequacy). In particular, the study is expected to inform the current discussions on pension reforms in a number of Member States, with a view to supporting people in their retirement, as is also outlined in the CMU Action Plan. Mairead McGuinness, Commissioner for Financial Services, Financial Stability and Capital Markets Union, said: “Pensions are the main source of income for over 25% of the EU’s population at retirement. We need to ensure that pensions provide a dignified and appropriate standard of living for our retired citizens. Capital markets can contribute to increasing pension savings in the short term, and adequacy in the long term. This study offers new insights on the effectiveness of and best practices in auto-enrolment schemes. I hope that the findings of this study will inform ongoing discussions on pension reforms in a number of EU Member States.” The full study is available here. For more information please see the dedicated webpage.