EDHEC-Risk Institute Considers that the European Commission White Paper on Pensions could be Improved

Written on 10 October 2012.


In a letter addressed to Mr László Andor, European Commissioner for Employment, Social Affairs and Inclusion, on October 4, 2012, EDHEC-Risk Institute considers that the European Commission White Paper constitutes a first step but that the Commission should go further in terms of harmonisation and better take into account the specifics of the financial management of pension funds.

As such, EDHEC-Risk has highlighted three key messages from its study:

1. The current pension debate should be used by the Commission to foster increased coordination in pensions reform. When discussing the sustainability of public finance, one medium-term objective could be to recognise unfunded implicit pension commitments.

2. The prudential framework for pensions is bound to have far-reaching consequences, and it needs to respect the particularities of pension providers, which are not those of insurers.

3. New regulation should encourage the generalisation of asset-liability management practices, both for pension funds and individual retirement products, using the best available knowledge and techniques and evaluating micro as well as macroeconomic impacts. A move towards hybrid pensions could, with this objective in mind, provide a more adequate conceptual framework for European countries to converge towards.

A copy of EDHEC-Risk Institute’s letter to Mr László Andor, European Commissioner for Employment, Social Affairs and Inclusion, can be downloaded here:
EDHEC-Risk Institute letter to László Andor, European Commissioner for Employment, Social Affairs and Inclusion

A copy of the EDHEC-Risk study can be downloaded here:
EDHEC-Risk Publication Response to the European Commission White Paper "An Agenda for Adequate, Safe and Sustainable Pensions

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